Over the years we have spoken to thousands of small business owners about their marketing.
When asked about how they generate leads to grow and sustain their business the answer is almost always,
“We get most of our clients through word of mouth”.
In a recent survey, we found that 16.4% of people said that getting more referrals was the number one marketing priority they needed help with (second only to generating leads by other means (20%)). So referrals are a big deal, especially when you consider that referrals actually generate warm leads.
In fact you could almost say that referrals are the lifeblood of most small businesses.
So, where do these referrals come from?
Typically there are two major sources of recommendations:
- Peer referrals – clients recommending their friends and colleagues.
- Referral networks – relationships with other businesses recommending their clients (eg a Financial Adviser getting recommendations from an Accountant they have a relationship with).
Wherever they come from, the challenge is still the same:
“What can we do to get more referrals than we do now?”
A 5 point plan to take your referrals to the next level
There is a tried and tested method for generating referrals can be broken into 5 steps.
It can be (and is) implemented by a broad range of businesses from professional services to software as a service brands (eg Dropbox).
Each step is important but for the method to really work to its full potential all five need to work together.
1. BE AWESOME
OK, this step is a bit of a no-brainer but is your business ripe for referrals?
More people are going to recommend a brand they love.
When was the last time somebody went out of their way to say to you, “Hey, you should consider using Brand X because they are average”.
What makes your business extra-ordinary?
Your “extra-ordinariness” could be:
- The way you do what you do (your method)
- Benefits that you consistently deliver (solving/satisfying customer needs)
- Your ethos (something that you and your community both believe in).
Now you don’t need to necessarily revolutionise your industry. Your extra-ordinariness could simply be that you “really listen” or you consistently “make their life easier” or you “put ethics before profits”.
The best way to define this out right now is to ask yourself (or your clients directly),
“What do people love about us?”
Your aim is to create a REFERRAL STATEMENT that looks something like this:
“We recommend [your business]. They do/are [your service type] and what we love about them is [your extra-ordinariness].”
Now, don’t let a slightly bland sounding Referral Statement stop you from proceeding because this will evolve as your business evolves. It’s a journey – but you’ve got to start somewhere.
2. BE EASIER TO REFER
This step a bit of a paradox because it is often perceived as the hardest.
Do you have a mechanism to make recommending you almost completely effortless?
Or instead, do expect people (who love you) to have to:
- Remember to open up their email, Facebook or LinkedIn.
- Go to the trouble of writing and sending a message describing or recommending you and providing your best contact details?
Sounds hard, right?
Instead, imagine, clicking a “REFER A FRIEND” button that takes people to an attractive place that simply captures the referral and takes care of all of the referral communications (including their message to their friend or colleague).
- Brands like Dropbox, Uber and Spotify have automated something just like this to grow their brands with the need for much advertising.
Another brand that does this well is Fiverr.
There is a Invite a friend link for logged in members (buyers or sellers) of this budget outsourcing service that leads to this.
Fiverr then sends the referral an email (or global social media post) on your behalf with everything sweetly presented (including their Referral Statement “The fastest way to get things done”) and a call to action to enquire further.
How easy (and attractive) is that for Fiverr referrers?
But how can YOU do something like that.
Well there are a range of online services available that can provide links, landing pages and follow-up emails. Some are hard, some are easier but not exactly right for you and some are just right. But more on that later…
In a nutshell, you want a mechanism that has:
- A landing page – a destination(with a URL) to send referrers to.
- Email/social media automation – to send invitations to referrals or social media friends and thank you (or reward) messages to your referrers.
- Calls to action (CTA) – a measurable task (eg a link to book a meeting or demo) on your invitation or follow-up emails/messages.
- Tracking – who has been referred and engaged with the CTA.
3. BE REWARDING
Put yourself in the shoes of someone who is likely to refer you.
I (the potential referrer) obviously like your business and know that making referral looks easy (see steps 1 and 2 above).
But there is a little RISK vs REWARD to consider…
“Why would I stick my neck out (and risk my reputation) to recommend your business to someone else?”
“What’s in it for me?”
Now, this is different kinds of REWARDS for different businesses and market. Some examples include:
- Goodwill – it’s just enough to know that I have helped a business or organisation that I love.
- Prize – something of value to thank me for the referral.
Eg: Movie tickets, a bottle of champaign, a donation to a cause (on their behalf), etc - Credit – a dollar value credit or discount for your services (often offered to both the referrer AND referral).
Eg: One month free subscription, one free consultation, 50% off your next purchase, Dropbox
Some real world examples of rewards (click links to see their conditions) are:
- A Free Ride for recommending Uber to a friend.
- Get an extra 500mb of storage by recommending Dropbox to a friend.
- A $25 Movie Voucher for every meaningful conversation Feedsy has with a referral.
The value of an incentive (or whether you offer one or not) and what you are rewarding is up to you.
Other things to consider are whether you are:
- Rewarding both the referrer and the referral (or just the referrer).
- Simply rewarding the supply of a lead or is there some KPI to qualify the lead (to ensure they are not recommending members of their family or random email address, say) – eg only if they sign-up or book a 1st meeting.
- Promoting your reward or keeping it as a nice surprise.
However, the biggest reward you can offer a referrer is a big huge “Thank you!”
The reward is something you can experiment with to find a sweet spot between the value you place on a warm lead and what motivates your referrers.
4. BE THERE
In some businesses, it is not uncommon to only see clients once a quarter or even annually. If this sounds like you then no matter how awesome you are to refer, the chances of clients thinking of you often enough to increase their current referrals are not great.
So how do you stay in regular contact?
Probably the easiest method of keeping your brand welcome and in front of your clients is via an email newsletter.
“Easy. Really?” you say.
Well, it’s easy if you’re using Feedsy (blatant free plug).
There are obviously other ways of staying in contact (eg social media, seminars, webinars, phone calls, etc) but email tends to deliver the best return on investment (and your time).
And what we also like about email newsletter is that every month it is so easy to place a “REFER A FRIEND” link, button or promo row under some helpful and even entertaining content and in front of your clients. If you are a fan of Gary Vaynerchuk, this is a classic example of GIVE-GIVE-GIVE-GIVE-ASK.
Remember, if you are not in front of your clients – you are invisible.
5. DON’T BE SHY
This step is simple: Don’t be afraid to ask.
Adding a “REFER A FRIEND” link, button or row to your email newsletter is one simple example of asking for a referral (now that wasn’t hard was it?).
Hey, while we are talking email, why not add a “REFER A FRIEND” link in your standard email footer – so every email you send a client (usually with great or helpful news, right) is subtly asking for a referral.
Another great place to include a link to your referral page is on your website. This is not jus important for business with high traffic or regular visits from their clients. It also makes it easier ask people to invite their friends “By clicking on “REFER A FRIEND” at the top of our website”.
Hang on… “Actually ask them personally?!”
Isn’t that a bit pushy? What if they don’t love me enough?
You obviously have to pick your right moment and this is after helping with something or getting some positive feedback and can be phrased as
“I am glad you liked it. Hey, as you probably know, our business has been built by word of mouth. If you ever think of anyone who you reckon would benefit, I would welcome an invitation – in fact there is now a REFER A FRIEND link on our website. [pause … read the room … then maybe …] Oh great! Is it OK if I email a link to you to make it even easier?”
Other triggers to ask for a referral is after someone provides a testimonial or scores high on a Net Promoter Score (NPS) survey.
Remember, that if you are a semi-mature business your clients won’t normally proactively recommend you enough to increase your growth.
You get the picture.
NEXT STEPS:
- Define your Referral Statement – but don’t get stuck navel gazing – just get started with something.
- Choose a mechanism (develop one yourself or use an off-the-shelf solution) that will make your clients life easier and matches your needs and budget.
- Choose an initial reward model and give it a try (and measure).
- Create and send a regular email newsletter and include links to your referral page on everything.
- Look for or create moments to ask for referrals
At Feedsy we have developed our own Referral system:
- Landing page
- Automated emails to referrer, referral and us (telling us we have a new referral)
- Analytics.
We would love to get your feedback (and even a referral if you are feeling the love) by clicking HERE.
Oh and for a limited time, your referrals can earn you a $25 Movie Voucher.
