There is no doubt that growing a business is tough work and today’s economic climate is certainly not helping matters. Selling is a time-consuming process and filling your “sales funnel” with new, qualified prospects on a regular basis is a difficult task. Let’s face it: the old days of cold calling are long gone. Decision makers are busier than ever and if they don’t know you, trust you and have never heard of you, chances are they don’t want to talk to you. The good news is you can acquire new customers based on referrals from the people that already do know you, do trust you and do see the value in the product or service that you offer! If you are really good at what you do, those referrals will come without you ever having to ask for them.
You may be asking yourself, “Why do I feel I’m qualified to give advice on referral marketing?”. Well it just so happens that Synapse has grown by over 900% in the last three years – mainly through word-of-mouth referrals. That’s right – no sales team to manage, no excessive marketing budgets – just some great referrals from the people who know us the best: our clients! Not only does Synapse continue to grow, but so does our team. In one year, we have grown from 18 employees to 30. Now that’s some powerful referral marketing!
I am certainly not suggesting that you change a well-organized sales structure if it is working. But if you are finding that your only business is coming from your current clients and not from referrals, there could be room for improvement when it comes to customer satisfaction.
Referral marketing can have a very positive impact on your bottom line. Here’s how:
- Your sales team will spend less time prospecting and more time on keeping your new customers happy.
- Referrals are already warmed up and ready to go. Since they trust the person who referred you to them, the sales cycle is shortened dramatically. This alone can turn a prospect into a revenue-spending customer very quickly.
- Referrals quickly increase your sales revenue. The closing ratio for non-qualified leads is about 10-15% versus a possible 60% (or higher) close ratio with referred leads. That translates into lower customer acquisition costs.
- When a satisfied client refers someone and you give that referral the same great experience, you are now making the referring client look great. Making your client a “Rock Star” is a sure fire way to keep them loyal forever!
The most important factor in generating referrals is defining the communication process upfront. When a client refers someone to you, it is very important to let your client know how you will handle contacting those referrals. This will make them feel more comfortable in sending friends and associates your way. Assuring them that you don’t use hard sell tactics and explaining the professional and courteous process you will follow is critical. Remember, people do business with people, and establishing a trusting relationship is the key to making those relationships last.
So, referrals are wonderful, but how do you get them? Just ask! There’s nothing wrong with asking for a referral from a customer with whom you have established a trusting relationship. Asking for referrals can be uncomfortable, especially if you haven’t done it before or are nervous about the response you might get. The worst thing they’ll say is “No”. And if you hear “No”, you get the opportunity to ask if they have had any bad experiences in the past, and if so, assure them again that you are completely professional when approaching new prospects. If they still decline, thank them for their consideration and don’t pursue it further. In this situation, chances are you may not have established a trusting relationship with this client.
When you ask for referrals regularly during the course of your business dealings, you may be surprised that quite a few customers are happy to oblige. As you see more referral business come your way, be sure to show your appreciation to the customer who gave the referral. This step is critical in order to keep generating more referral business. And don’t forget, a referral is a referral – no matter if it converts into a sale or not – so be sure to thank your client just for trusting you enough to send someone your way. A hand written thank you note, in my opinion, is still the best way to show your appreciation. Gifts are nice, too!
In summary, referral marketing can shorten your sales cycle, increase your cash flow quickly, and dramatically improve your bottom line. Take care of your customers, do whatever it takes to exceed their expectations and watch your business grow from referrals. It’s how Synapse has grown so fast and how we have built long-term lasting relationships with our clients. We certainly haven’t reinvented the wheel when it comes to customer service; we just love our clients and strive to give them the best possible experience every time the opportunity arises!