How to Gain New Customers By Using Existing Ones

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Referral businessEditor’s Note: This blog  post comes to us from Mike Kamo, director of marketing for Stride, a sales CRM that helps small and medium businesses increase their revenue.

Referrals have long been one of the most effective marketing tactics in business.

All the way back when we were trading fish for bread and milk for eggs, we’ve been relying on our friends and neighbors to help us find the products and services we need.

If that’s true, then why do so many of us not have solid systems in place to generate those precious referrals?

Because we’re busy. And because asking for a referral is almost as hard as asking for a sale, and of the two, only the sale produces immediate cash for you.

It’s too easy to forget that the people you sell to probably know others that you could help, if you just had their names and could reach out to them.

If you’re selling something and have customers who are happily paying money for it, you need a referral system that will convert those happy customers into word-of-mouth advertising for you. If you don’t have this kind of system, you’re absolutely leaving money on the table.

Luckily, it’s not that hard to gain referrals, if you approach it correctly.

Here are the 6 steps you need to take to build a successful referral system for your business:

1. Make customers happy

If you don’t have a product or service that makes your customers happy, you won’t get referrals, simple as that. If you just had to hire new customer service reps to handle all the customer complaints you’ve been getting lately, a referral system is the least of your worries. Go fix your product or your delivery process first.

But if you don’t even have a customer service department because you’ve never had a complaint, you can proceed with confidence. You are primed and ready to start driving new referral business.

2. Ask the right questions

If your customer knows someone who obviously needs your services, you won’t have to ask for a referral. They’ll just give you the name all on their own.

So don’t bother asking: “Do you know anyone who would need my services?” The answer to that question is almost certainly “Uh, not that I can think of, but I’ll let you know if someone comes to mind.”

Instead, focus on the problem you solve, not on the services you provide. Ask, “Can you think of anyone else in your company who’s been suffering from [insert symptoms of the problem you solve] just like you were?”

That’s a far easier question to answer and one that’s much more likely to get you the referrals you’re looking for.

3. Ask for referrals in non-traditional ways

In the age of the Internet, there are all kinds of new ways to ask your customers for referrals.

If you have an email list and a newsletter, ask your customers to give feedback by simply responding to the newsletter by email. You could ask them the same “Can you think of anyone suffering from [symptoms of problem you solve]?” question, or you could ask them to tell you a story of how one of your employees went above and beyond for them.

The point here is to leverage that modern content marketing we’re all doing. Rather than just pushing out new content all the time, you should occasionally ask for a reply. It costs so little to do so, and could mean wonders for your bottom line.

4. Ask for indirect referrals

Social media sharing is another built-in way for your customers to drive referral traffic to you. A Facebook share or a Twitter retweet can send a stream of new customers your way, depending on the influence of the one doing the sharing. It’s easy to include social media sharing buttons on your marketing content and in your newsletters, and the payoff can be huge.

In addition, sites like Yelp that aggregate customer reviews from around the web can be another way your clients can send referrals your way. Even Google Maps includes some reviews in its search results. Take the time to ask new customers to leave you a review on one of these sites.

Also, if you haven’t done a Google search for what people are saying about you and your company, you really should. Hopefully you’ll be pleasantly surprised.

5. Say “Thanks”

Whether a referral turns into a sale or not, you still need to say thanks to the person who gave you the name. I like to do this via hand-written note the same day that I get a referral. This will automatically set you apart from most of the companies your customers deal with. They liked you enough to give you one referral; now they might just be willing to give you more.

6. Follow-through

If you get a referral but never contact the prospect, you risk leaving a bad impression with the customer who gave you the referral in the first place.

They trusted you with the name of a friend or businessperson whom they believe has a problem you can fix. It’s your responsibility to honor that trust by following up on the lead.

Advanced tactics

If you execute the above six steps, you will start getting more referrals, but there are also a few things you can do to super-charge the process. Here are two of them:

Offer an incentive to share

Give the customer an incentive to promote your brand. At Stride, we offer a free month (up to 3 total) when a customer sends us a referral that signs up for a free trial.

All our customer has to do is create a Facebook share or send a tweet to send some people from their own network our way. If any of those referrals sign up for a free trial, our customer can potentially save hundreds of dollars. The best part is, it requires little work for the customer to send us business – and there is a mutual benefit.

And then…ask your customer to reach out

If you have a good-enough relationship with an existing customer, give them the option to contact their friend directly, instead of just giving you the friend’s phone number and email.

Nothing is more powerful than a personal recommendation delivered by a friend or colleague. If you can get a customer to do this for you, you will not only get more introductions and referrals – you’ll close more of them as well.

introduction definition

Conclusion

I think we’re hard-wired to give referrals to our friends. It feels great to be at a party and have the chance to say, “Hey, I know a guy who can help you with that…”

If you follow these steps, you will get more business through referrals … and you’ll have happier customers too, since they’ll get to help their friends solve their own problems.

What’s your experience been? Have you found a way to increase business by leveraging your existing customers?

Read about ways to thank your brand advocates.

 

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  • bri44any

    The right questions to ask are the ones that are easiest to answer. By asking if you know someone experiencing these pain points, you in essence tell them the importance of providing referrals, that referring people is a kind and helpful thing to do to help solve other people’s problems.

  • Tim

    I think a lot of people overlook the most obvious and most important point, to make customers happy. Happy customers are going to share their experiences with their network. Any other idea you mentioned is predicated on making customers happy.

    • bri44any

      That’s an interesting perspective. I like it. Even saying thanks for a referral is a way to make them happy about referring someone to you.

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