Referral Business: 3 Steps to Generating Unlimited Referrals
Building a successful small business is no easy feat. To make it even more challenging, you are competing with other businesses that offer the same or similar type of service that you provide. This can be discouraging and disheartening when someone tells you they enjoy your work but ultimately have to go for the cheaper (and likely inferior) option because it's close by or cheaper in price.
Don't give up! We're going to show you how to generate unlimited referrals so you can grow your business and take on your competitors by outdoing them in quality of service, integrity, professionalism, convenience and expertise.
To be successful in generating referrals, you need to have a referral program set up that your clients, customers and stakeholders will jump at the chance to use. Let's talk about how you can create a system that brings all of these benefits
Step 1: Identify What You Want a Referral To Do For You
The first thing you should do is identify exactly what you want the referral to do for or get from you. This may seem like an obvious thing to do, but many people don't take this simple step. For example, say someone decides they want to be referred because they want free work done. This isn't a strong enough reason to generate a referral.
Or say someone wants to be referred because they want to feel good that they referred you. This is also not enough of a compelling reason. You are making a business transaction here, so you need to get what you want out of the referral. Otherwise, why bother? In this circumstance, we want the referral to do something in exchange for us doing something for them.
Obviously, there are going to be different types of referrals depending on what kind of work your business does. Think about what they are going to get out of you instead of the other way around. If there is no reciprocal exchange, then why would they want to refer you?
For example, say a referral is coming from a client that you've referred and they are happy with the work that your new client did. Your new client has told them they will make a referral because they want their house painted. Now you have an inbound referral coming from a happy customer that wants to refer someone else. That's fantastic!
It's important not to put all your eggs into one basket though… Let's say your new client tells the person who referred them that their house needed some major repair work done. If they go with the cheaper option, your clients reputation is at risk. They are essentially endorsing the cheaper company (possibly a business they know nothing about) and could potentially harm your own reputation if they paint the ceiling a different color than it was when they first approached you.
What do you have to lose? The risk is minimal and the reward will be worth it. By referring this person to someone else, you are insuring that your new client's reputation is protected and possibly making them more money because they can now take on more jobs than they could before.
Just remember, you are creating a system where both sides can win. This is not a case of one sided loyalty. The main thing to keep in mind is that there needs to be appreciation for work done by both the referrer and the person being referred to. If all parties feel like they won when the referral takes place, then you'll have a very successful system on your hands.
Step 2: Make Referrals Easy To Identify
The second step in creating an effective referral program is to make it easy for clients, customers and other stakeholders to identify someone they know who would benefit from using your services. You're going to want something more than just them saying "I can give you a referral". That's not enough.
For the best results, try to create a template that your clients can use when they refer other people to you. There are several examples of templates that you can use from a basic referral email to a more formal letter. What you'll want to do is fine tune your formula for maximum effectiveness. Remember, it's about the end result, not how "professional" it looks on paper (but presentation is still important).
Let's take the example of a simple referral email…. Notice in this example how the client was able to do more than just give us an introduction… He also provided some specific pieces of information that will help us later (we haven't inquired about payment yet in this scenario).
Now let's take a look at an explanation of one of our larger jobs that we received from a referral… At the end, you can see the owner is asking us additional questions to help them determine how best to use their money and make sure that they are getting their money's worth. This is exactly what you want out of your clients when it comes to referrals
Step 3: Make Referrals Easy To Take Advantage Of
The third step in your referral program is to make it as easy as possible for people to take advantage of it. You don't want anyone thinking they have to go through excessive measures just to attempt generating a referral. Create a system where people feel free and comfortable taking advantage of the opportunity.
For example, say you want to create a general template that your clients can use. You should not expect them to forward you a "form letter" every time they refer someone. That would take way more effort than they want to give in the first place.
You should also provide them with additional resources and multiple options on how to execute their referral once they have made contact with the person they want to refer. This will help ensure that there is a seamless transfer of information and that both parties are flexible with their options (should it be specific or not).
Conclusion
Here we have taken a look at how you can establish strong, effective referral programs within your business. This is your chance to put your brand in front of new people who will help you grow and increase the benefits of doing business with you.
While there are many different ways to create and maintain your own referral program, these three steps should help give you a good starting point that is reliable, easy to operate and effective at generating new clients. The key here is to be consistent in getting referrals and treating them right when they come in. It's always better to receive a referral than it is to make one.