Five Steps to More Customer Referrals

Tips for Getting Customer Referrals

Forget cold calling! The best way to expand your business is to convert your customers into sales people who generate new business for you. Get them to recommend you and you'll discover the shortest sell cycles you've ever had. This article explains how to get more customer referrals.

In order to compete in today's business environment, your business simply must have a healthy customer referral program. Contrary to popular belief, customer referrals don't just happen. They require an intentional effort to get the right people talking about your company and your products.

With the a little know-how and a lot of hard work, you can put customer referrals to work in your business. Here are some tips to get you started.

1. Be selective

Not all of your clients and customers will be good prospects for referrals. Your job is to identify and cultivate the clients who have the potential to promote your business to the right people. You should be looking for clients who have expressed enthusiasm about your products and are well-connected with networks of people who are likely to be interested in what you have to offer.

2. Ask

Once you have identified clients who may be good candidates for referring your business to others, your next step is to ask them if they would be willing to make recommendations on your behalf. Some business owners find asking to be the most difficult part of the referral process. But the fact is that until you ask for them, you won't get the volume of referrals you want in your business. Period.

3. Educate

Asking for referrals is important. But it's also important to provide your clients with the selling tools they need to promote your products. This can be done any number of ways ranging from short e-mail announcements about special promotions to taking a key client out to lunch to educate him about the scope of your products and services. Be creative. But more importantly, keep your existing clients in the loop.

4. Create incentives

Let's face it: Everyone likes to feel special. One of the best things you can do for your business' referral program is to reward clients who successfully refer your products and services to other clients. Sometimes these rewards may come in the form of discounts. Sometimes they may come in the form of free merchandise or services. Whatever the reward, consistently reinforce the fact that you appreciate and value customers who are willing to help you promote your company.

5. Plan and track

Developing a marketing referral plan is probably the last thing on your mind. But if you are really interested in jumpstarting customer referrals, it should be the first. A marketing referral plan identifies your target customer base and establishes referral goals for a given time period. It also contains a mechanism to monitor how effective your referral system is working. (This could be as simple as asking customers how they heard about your company.) The result is a customer referral program that can easily be analyzed and adjusted to suit your needs and goals as a small business owner.