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Power of Referrals

There is a certain power about referrals, but the best kind is personal. A personal referral is much more compelling that seeing an ad in the paper or receiving a coupon in the mail. Credibility and legitimacy are earned and a good start is having a live person recommending a product or service. Most businesses are missing out on what could prove to be their ultimate marketing tool; the personal referral. Most businesses provide you with their product or service and a “passive referral” typically brings a few new customers but not significant numbers.  People trust what others tell them about a business — good and bad. A business that understands the power of referrals can leverage that trust and satisfaction with their products or services.

A powerful referral system may increase your “bottom line” by 5% to 20% or more • Most business owners leave an immense amount of money on the table by not having dynamic referral systems in place • Once you have referral systems set up, all it takes is a little follow-up effort by yourself and your employees.  Most people find it difficult to make choices about mundane things like shopping or restaurants • They would prefer that someone they know provides them with a recommendation or referral (removes the stress) • Most people love trying new places after receiving positive recommendations from friends or associates.

There are two major types of referral systems

  1. “Static” Referral System
    1. Customers are familiar with your referral program and understand the “perks” they will receive from sharing information about your business with family, friends, associates and anyone who shows an interest in what you do • Involves a concerted effort and approach in which you ask your happy clients or customers for referrals and gladly reward them for their efforts, yet you don’t directly move the process forward.
  1. “Proactive” Referral System
    1. You direct the entire process and have the power to reach potential customers who have been influenced by their friends or associates • You motivate your customers to become “promoters” of your business by enticing them to share information about what you do with anyone and everyone they know • How do you turn a static referral program into a super-charged, systematic and much more powerful “Proactive” Referral System

The 5 Referral Levers

  1. Ask your clients a “leading question”
    • Engage your client in a discussion and remind them of what you’ve done for them
    • Focus on the results
  2. Use a referral sheet or “brain tickler” form
    • If you’re looking for particular businesses to target, list them on your referral sheet
    • Add “bookkeepers” to the list
      • hone in on certain people they know in that field
      • Demographic profile
  3. Use the Rolodex
    • Ask your clients to access their address book to find 5 to 10 names that fit your demographics
  4. Get to know who your clients know
    • Your client may know a person in the perfect industry who in turn knows a lot of quality people who could use your service or product
      • Double your referral
  5. Send a self-mailer on a periodic basis
    • Use the mail to send a postcard to your clients asking them to write down 3 to 4 referrals
      • This can be a self-mailer with pre-paid postage
      • Generate fresh new prospects

Personal Client Base

Use these three features so your clients actively promote your business and deliver quality referrals by educating them on the specific results you can produce, what makes your business different or unique from others, and help them to understand your products, benefits and services.

Referral Prospects

Share what’s special about you and your business with your potential new customer who came to you as a referral. Also, share the advantages of doing business with you, how they should expect to be treated as clients and tell them exactly what you will do to incentivize their continued patronage. Tell them how you will serve and benefit them. Your service may be so great and your client satisfaction so huge you may attract leads without any inducement at all. You can greatly increase and keep the referral numbers up by offering a good incentive program. Bonuses give you the ability to offer the prospect something with a high perceived value but with little out of pocket cost. Bonuses can be directly related to your services or your product line or offer bonuses that have nothing to do with your business.

Convert Prospects Into Clients

The easiest and best way to convert a prospect to a customer is by personal communication with you. Arm your “promoters” with written material they can share it with others. This gives you the opportunity to make sure your message is consistent each time someone reads your marketing information. For example, provide a brochure to the referral outlining the benefits they can expect to receive.

A successful referral program requires you to conduct a “trial and error” test and spend some time working out all the challenges that may turn up during the process. You will want to continually revise your script until it’s perfect. You or one of your top management team members should personally test the referral system until you’re satisfied that it’s seamless. This will provide the best quality to your customer.

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