How to get more referrals

Word-of-mouth used to be pretty much the only way of winning new business prior to the start of the 1900s. Referral marketing will never go out of fashion because it is the most effective method. This is because one of the biggest barriers to closing a sale is trust and referred prospects already come with a degree of confidence built-in. It is also the most natural way of marketing a business because it is human nature to want to recommend a business we like and to caution others against ones we don’t.

When I talk to small business owners it is quite common for them to tell me that their number one way of getting new businesses is through word-of-mouth. However, when I go on to ask them how they could generate more referrals, they normally have little idea as to how that could be done.

You can’t just sit back and wait for referrals to happen because they won’t. Of course any business that provides a good service will always pick up the occasional referral. What most small business owners don’t realise, though, is that it’s possible to create a systematic approach that consistently generates quality referrals.

Referrals have always been the cornerstone of my business-building efforts and, over the years, I have developed a 5-step approach to referral marketing which I call REFER.

Recognize. Your first job is to do some thinking about your business. You need to be able to paint a clear picture of your ideal prospect so that your referral sources will instantly know one when they come across one. Get clear on the problems that your business solves and what makes you unique and different from your competitors. If you fail to do this, you will end up with poor quality referrals that will waste your time.

Establish. Now go through your contact list and identify people who could potentially refer prospects to you. Your most probable referral sources to begin with will be the contacts that you already have credibility with so highlight them. Set up telephone appointments or meetings with these people. When you talk to them, explain that you want to form a mutually beneficial relationship. Find out what would motivate them to refer business your way and how you could help them on an ongoing basis.

Formulate. Next based on what you learned, you need to create ways that make it easy and worthwhile for your referral sources to send prospects your way. So you need to formulate an offer that makes people want to refer to you. Not every referral source will want a financial reward. Some will want you to send referrals their way in return, whereas others may prefer recognition in some way. So provide each referral source with the particular tools they need to refer to you – be it business cards, marketing materials or online tools – and set up the reward systems that work for them.

Educate. Stay in regular contact with your referral sources and continue to teach them about your business and the kind of prospects you are seeking. Don’t be shy – you need to explicitly ask for referrals. A great way of phrasing the request is by asking the question ‘Who do you know who …?’

Report. Make sure you keep your referral sources in the loop and motivated by systematically updating them as to the progress of the referrals they send your way.

Bear in mind that the REFER approach to generating word-of-mouth prospects is hugely effective but it does require a large commitment from you in terms of time and effort. Business is about building relationships and they can take time to develop, but are always worth the effort.

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