The Art of The Referral
By Rod Kasnick
Service businesses thrive on new business, the lifeblood of growth. But very often, marketing efforts target direct advertising as the primary means of attracting new business. Pure advertising, be it Yellow Page ads, flyers, direct mail or other print media have low percentage returns, typically in the area of 1% to 5%, depending on the medium and the message. This is an extremely poor return on the investment.
Almost everyone understands the power and effectiveness of direct selling, but here the cost is extremely high when factoring in salaries, health benefits, insurances and other methods of employee compensation. Even though some of these costs may be mitigated, it remains a high cost per return. Again, this is a poor return on the investment. Yet many service business owners overlook their virtual sales force, one that has virtually no cost yet produces huge returns. Where do you find this virtual sales force? Look no further than your existing customer base.
Human nature is a VERY powerful force. The savvy business owner knows that only a slight nudge in the right direction can start this force working for him. Have you ever bought something so exiting and wonderful that you just had to tell someone about it? Have you ever been the recipient of such a great deal that you just had to bring it up at the next social gathering with friends? This is the force I am talking about. Human nature is such that when we feel good about something we naturally share it. As a service business owner, you work hard and do the best job you possibly can for your customers. All indications are that your customers are happy with
your work. They bring you back again and again. But have you given these ‘virtual sales people’ the right tools to carry your banner to their friends and relatives? The right ‘nudge’ can make this ‘virtual sales force’ literally explode with positive results. Let’s explore how to put this powerful sales force to work for you.
Many service business owners see referrals as a random kind of happening, not something around which they can create a repeatable system. Sure they ask for referrals, and smatterings of referrals do come in, and they think ‘Well, that’s the best I can hope for.’ And that’s as far as it goes, with no predetermined measurement plan or tracking in place to gauge the effectiveness of what they determine is a referral plan.
Sales people like to be recognized and appreciated. So does your ‘virtual sales force’. Every time you receive a referral your ‘virtual sales person’ should receive a letter or email letting them know you received the referral and that you greatly appreciated it. Why would they send another referral if they don't feel you value them? Of course, your letter or email may contain new service items of interest to your ‘virtual sales person’, thus leveraging your contact with them, but the main focus HAS to be the acknowledgement and thank-you.
OK. You now realize that there is an army of sales people ready to go to work for you. And you have established the beginning of a standard recognition system. You know your services inside and out, but your ‘virtual sales force’ only sees one facet of your business, that which you do for them individually. Are you ready to let this army loose without some coaching about what to say? That is, do your clients really know how to talk about what you do? Do not fail to educate them sufficiently to become active promoters of your service. Talk to your clients about the other services you perform. Be enthusiastic, it truly is contagious. If your ‘virtual sales person’ is enthusiastic about your business, their referral rate will go up. People will feel compelled to get this great deal because of another force of human nature, the need of belonging. ‘Sally really likes this, I like Sally, therefore I want to feel the same way as Sally’. This may be unconscious, but it is there, nonetheless.
You can put your list of services on the receipt you leave with your customer. Have a website which outlines your services. Leave a few business cards or brochures. Just make sure the ‘virtual sales person’ can speak about your business from a position of fact.
Your brochures should be professional without being overly ‘sales-y’. Your website should be properly constructed with your services prominently displayed. Make sure the referral can contact you quickly and easily. If the information is not very clear, doesn't have enough depth or is poorly designed, the referral may be turned off and won't call you.
Some customers may be hesitant to become one of your ‘virtual sales persons’. This may be a fear of the consequences of referring you to their friends and neighbors. Are they sure you will not spam the referral with emails, hound them on the phone with unwanted solicitations, or any of a number of other concerns? Let them know exactly what you will do with their referral. Assure them that the referral’s wishes will be respected and they will be treated professionally. If you treat YOUR customer that way, point out their referral will receive no less. Then let it go. Human nature being what it is, more often than not asking them to refer you will be all that it takes (along with your exemplary service). Yes, ask them for referrals. Have a well-defined ‘script’ that is comfortable for you without sounding ‘sales-y’, and use it, at the conclusion of EVERY job.
There is nothing wrong with being aware of the ‘WIIFM’ principle. Most people want to know ‘What’s In It For Me’ but would be very uncomfortable asking. You would reward your employee sales force, wouldn’t you? Your ‘virtual sales force’ deserves no less. Referrals are gold, they are valuable, and creating a system of rewards is essential to keeping the flow of referrals coming in. This can be as simple as a CD of you customer’s favorite type of music, or a gift certificate for lunch for two at a local restaurant. Just make sure to implement a system to acknowledge and reward the referrer.
Keep your name in front of your clients. Have a regular periodic mailing, or email, just to say ‘HI’, thanks for their past support and that you are looking forward to your next visit. Or you can use the occasion to introduce a new service that you have added to your offering. Whatever you decide, it should be planned, consistent and regular. It is recommended that you don’t go longer than 90 days between contacts.
Beyond these few ‘baby steps’ you can get much more creative when planning your referral system. There are actually dozens of techniques, strategies and approaches that work very well to generate a large volume of
referrals. Do the research to learn what these strategies might be and how you could apply them.
Don’t develop your referral system in a vacuum. By that I mean, look at the process from your customers point of view to get some insight into what approach may or may not work and why.
If you worked with an Independent Professional, how would you prefer they asked you for referrals? What would you like them to say that would make you happy to send people their way?
What would you like to know about that Independent Professional's business that would make you more comfortable sending them referrals? What questions would you like answered that are currently unclear to you?
How would you like to be rewarded for giving an Independent Professional referrals? What would make you feel good? What would you be comfortable with? What would make you immediately pull out your list of contacts?
What information would you like to receive from an Independent Professional that would make you feel you were in touch with them? Stories of client successes, industry information, tips and techniques, ideas and resources?
What kinds of behavior from an Independent Professional might turn you off from giving them referrals, even if you were satisfied with their work? What did they do that bugged you or what was some little thing that they failed to do?
It all starts with a commitment to learn what referral strategies will work, determine the best ones for you, create a plan, implement a defined and measurable system and then follow through with unwavering persistence. Start today and very soon you will be swimming in referrals.
Author Information:
Rod Kasnick is the President of Wizdom Works. With his over 15 years experience as a developer of software applications for service businesses, he has an expert understanding of the needs and requirements of small and medium sized businesses. Wizdom Works developed and markets Easy Scheduler and Easy Scheduler LITE. To find out more about Wizdom Works and their products, visit www.wizdomworks.us