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 Referral-EASE: Secrets of Successful Business
Builders - Part 2By Mara Osis - Action International Do you want a referral-based business where your best customers act as your sales and marketing arm? Before we introduce some specific tools for you, let’s recap Part 1, where we looked at the fundamentals of building a solid referral program. Here are the main points we covered: - Decide that you will have a formal, proactive referral program – one that ensures referrals happen with minimal intervention on your part. - Define your ‘ideal’ customer. Know exactly what qualities you are looking for in a prospect so that your referral program attracts the best possible people for your business. - Test current customers against these ‘ideal’ criteria. Remember that your payoff for developing current clients and getting rid of ‘poor fits’ may be higher than getting new clients. Nurture current clients who are merely ‘satisfied’ and turn them into strong advocates for your business. - Calculate acquisition cost and lifetime value. Know how much you invest to acquire clients now and how much a repeat customer will add to your bottom line over several years. What revenues must a client generate before you recover your acquisition cost and begin to turn a profit? - Motivate your customers to refer you. Let them know how their referrals keep your costs down and allow you spend more energy on them. Be consistent and creative in rewarding and recognizing those that do. - Give before receiving. Those you have helped will strive to find ways to help you. The key to getting referrals from current customers is to make it as easy and rewarding as possible for them. Here are five specific referral strategies that will set you apart from the crowd. They can be adapted for a wide variety of businesses. 1) Schedule a special meeting with clients to mine their contacts and networks to find potential referrals for you. In this setting, your client can focus on the objective of a referral system. You can coach them on providing qualified prospects and ask them to introduce and promote you and your benefits these potential prospects – before you call them. 2) Offer gift certificates for free service or product for clients to distribute to family, friends or associates. A client who gets value from you will be happy to share the benefits of what you provide to others. Make sure clients are rewarded for this effort in some way. 3) Invite current clients to your special events, and encourage them to bring a qualified prospect along. This works well with special product promotions and information events. Capture new contact information at the event and have your follow-up strategy in place. 4) Create alliances with non-customers. Leads and referral clubs, as well as other business owners fall into this category. The key to success is choosing those who are already targeting your potential clients with non-competing products or services. Give! Give! Give! And then treat these referral sources as you would clients, with adequate rewards and recognition when they reciprocate! 5) Develop a ‘host beneficiary’ – a powerful, but little known and seldom used referral strategy. This literally means that the ‘host’ benefits from introducing you to new clients because they appear to have arranged a valuable ‘extra’ for their customers. An example might be an accountant who feels her client would benefit from the services of a financial planner or other business consultant, and arranges a free service that helps the client in a specialized area. As a retailer, you could approach another store and offer to give away a premium to that store’s customers when they visit you. In each case, use a product or service with high added value to the customer and relatively low hard cost to you. As with any lead generator, the benefits to you increase with the number of referral strategies you use. Remember to test and measure each one and focus on those that bring you the best results! Mara Osis works exclusively with entrepreneurs who want more out of their businesses…and more out of life. Contact Mara at 403.225.0906 or maraosis@action-international.com |