Referrals are an inexpensive way to obtain new customers. Many business owners say that they get a lot of clients through “word of mouth” or from referrals. But if I ask what their referral strategy is, I usually just get a blank stare.
At ActionCOACH we define a referral strategy as a way of generating new customers for your business for a low acquisition cost.
For a referral strategy to be effective you must make sure that…
- Your service must be extraordinary. Being good just won’t cut it here. For people to refer their friends and business associates to you, your service must be 1st class. Anything less could be a detriment to your business.
- You must have an offer that means something. If you don’t give people a good reason, a “what’s in it for me?” your strategy will fail.
One of the biggest mistakes in developing a referral strategy is having a clear idea of what type of clients you want referred to you. If you don’t set your rules up front and let your referral partners know who your business customer is, you’ll be wasting your time developing business from “D” type clients who will just suck your time and energy away.
Look at your current client list and see who your “A” type clients are. If you think of the 80/20 Pareto principle, these will be the top 20% of your customers that are generating 80% of your revenues or profits. It makes no sense to target more customers that want to haggle on price or are always late paying their bills, or are always looking for free advice.
Next key to a successful referral strategy is to make it pro-active. To have a pro-active referral strategy you must teach your customers how referral business to you will help them. Every time you educate a client on the types of referrals you are looking for you will have an advocate for life. But there is just one catch; you need to continue to offer them and their referral the level of service that you have promised.
If you would like more ideas, strategies, and examples on how to implement a referral strategy in your business, please request our free E-Book Instant Referral Strategies. CLICK HERE is receive your Free E-Book .