Referral business is a great barometer of your company’s health.
When you’re getting referral business, it means that your customers believe in your offerings enough to put their reputation on the line. They want to be known among their colleagues and friends for giving good advice – and they’re willing to make you a part of that.
Now, how can you tap into that goodwill and make it a little more predictable?
What Is a Referral?
Most referral business comes from “word of mouth.” That’s simple enough: One of your customers, vendors, or partners gets asked a question in your area of expertise by one of their customers, vendors, or partners, and recommends you for no other reason than you’re the right fit.
There are two things to notice about this process:
To Get Referral Business, You Need to Be On Someone’s Mind.
If you have an established business relationship with a person or an organization, odds are good they won’t totally forget about you.
However, they have to go one step further and remember you at the exact moment you’re needed – and that’s a little bit more challenging.
Most Referral Business Comes from Simple Goodwill.
For the most part, people drive referral business because they believe they are making the best recommendation for the job at hand.
That doesn’t mean, however, that you can’t drum up some creative ways to spark more frequent referrals so that everyone will benefit.
Benefits of Referrals For Your Business
Referrals can work for you in a ton of ways. From an increase in sales to building your brand awareness, you'll want to develop an effective referral program for the following reasons:
You'll Build Brand Trust.
When someone you put a lot of confidence in recommends a song, movie, meal, or the like to you, you trust them, right?
And, by default, you trust the brand associated with that product, right?
That transfer of trust is important since it's easier to convert a lead that has even a tiny margin of faith in you than it is to convert someone with no opinion at all.
What's even more important is that you're able to deliver on that referral. When a friend offers you something and it's actually good, you establish a sense of trust and loyalty in the brand.
You Can Reward Your Existing Customers.
Most referral programs operate by rewarding a customer for an online referral in the form of a discount or credit. This isn't a mandatory element, but it's certainly a great way to incentivize recommendations.
Showing your appreciation to your existing customers keeps them coming back to you and maintains your reputation of being an engaging and valuable business.
You'll Save Money and Resources.
When your customers are acting as your advocates, your marketing and sales teams can focus their time and energy into pulling in more qualified leads.
Sales teams spend less time on cold calls and more on guiding prospects down their pipelines.
Marketing teams can focus on developing more targeted strategies and allocate more resources into those projects.
What's more, your business can focus more efforts on your customers and reaching their circle of influence.
You'll Increase Your Sale Revenue.
G2 and Heinz Marketing found that 92 percent of B2B buyers are more likely to purchase after reading a trusted review.
That's a statistic that no one would dare dismiss. Referred leads are coming to your business with the intention of purchasing from you. It's almost a guaranteed sale once someone they trust tells them they should make the purchase.
15 Ways to Increase Your Referral Business Fast
Look at it the right way and referral business can be treated as a business development pipeline like any other. To grow it, you need to work on one of these two levers: brand awareness and offer awareness.
Let’s highlight some of the top ways you can do it:
1. Celebrate Milestones With Your Customers.
If you want people to remember you fondly, be there when they’re in their moments of triumph. When you first contact a prospect, you might scan for “trigger events” – like a new product, service, or location opening – to find common ground with them.
After you make the sale, keep scanning for these events and call to check in, even if it’s only to congratulate your customers on the great work.
2. Offer Recurring Incentives for Referrals.
When it comes to referral business, enterprises of all sizes can learn a lesson from smaller ecommerce entrepreneurs.
Smaller sites often offer customers a fraction of the revenue those they refer generate for the business – for six months, a year, or even a lifetime. These kinds of agreements can make a big difference in how certain clients think, so contemplate how it may fit into your business.
3. Follow Up After Customer Service Events.
Try as we might, nobody is perfect.
When things go wrong, however, it presents you with a fresh opportunity to strengthen the relationship by admitting to the blunder and making it right fast.
Keep an eye on your customers and follow up vigorously whenever something doesn’t quite meet their expectations. Exceptional service will make them much more likely to recommend you.
4. Cross-Pollinate Your Business Relationships at Industry Events.
Everyone’s heard of being a social butterfly, right? When you’re at an industry event your customers also attend, you have a chance to become a social bee.
Use every opportunity you can to extend your business network by getting introductions from your customers to decision makers at other companies. It’s not quite a direct referral, but close.
5. Collaborate in More Visible Ways.
If you want to bring a strong business relationship to the next level, seek out areas where you and your partners speak to the same audience.
In some cases, you can provide great value to those people without infringing on your partner’s goals. Consider sharing each other’s content on social media and engaging in long-term content partnerships to mutually raise visibility.
6. Do Your Research Before Asking.
When it comes to asking your peers for endorsements, it's always best to know who you're approaching first.
Before reaching out to a customer or company for a referral, use LinkedIn's Advanced People Search feature to identify if any of that individual's connections are even qualified for a referral.
You'll be able to find your ideal referral candidate to ask your customer about and make it that much easier for them to endorse you.
7. Refer Other Companies That You Believe In.
Tapping into reciprocity, it's seeking out the mentality of "take a penny, leave a penny."
Naturally, if you request a referral from a company, they'll ask for one in return. And the same applies vice versa. It works more in your favor, though, to beat them to the punch and refer them first before approaching them.
The hope is that they'll appreciate the recommendation and pay you back in kind.
8. Offer Multiple Ways to Advocate for Your Business.
There are other means of receiving endorsements other than referrals. Not everyone is comfortable with the act of referring a product or company to another person.
Instead of pushing referrals on them and damaging your relationship, pull back a bit and offer other means of generating word of mouth.
Reviews, testimonials, and serving as case studies are all excellent ways of promoting your brand without asking the customer to do a lot of leg work themselves.
9. Inspire Confidence In Your Referrers.
Speaking of comfort in referrals, it's a great next step to institute motivation and remove any hesitations your customers may feel in recommending you.
If you have a strong referral program in place already, let them know that it isn't a foreign concept. Companies leverage referrals all the time and a great deal of business comes from repeat customers anyway.
They'll feel better knowing that they're not the first to give it a shot or bothering their social circle.
10. Keep Your LinkedIn Page Updated on a Regular Basis.
This is important for when referees come to see what the hype is about.
Your LinkedIn profile needs to be current and up to date, reflecting your business' actual standing, values, and services.
If anyone comes searching to learn more on your company and what you offer, the referral becomes null and void if there isn't any information to back it up.
11. Generate Quality Content to Get Your Name Out There.
Provide value-based content that your referral sources can share within their networks. Well written blogs, case studies, or recorded webinars act as an excellent resource for them when justifying their recommendation.
By creating a wide library of topics and content formats, you can provide them with a great piece for every context.
12. Encourage Your Employees to Participate.
Your team members can be your greatest advocates and it's important to recognize that. Who can speak on your brand's value better than them?
Offer opportunities and incentives to get them speaking on the behalf of your business with their friends and family. They already know everything there is to know about your business, so they'll be great in leading the conversation.
13. Look Into Leveraging User-Generated Content.
User-generated content is a great way for customers to refer their social circles to their favorite brands in an organic way.
Encourage your consumers to participate in your growth by promoting social media campaigns that will highlight their photos and social posts.
People trust other people. An unofficial ad from a fellow consumer has a much stronger influence than any ad you'd come up with yourself.
14. Work With Influencers to Reach Larger Audiences.
Influencers have gained a great deal of power when it comes to marketing in recent years. Their followers trust their opinions whole-heartedly and often without question.
Look into collaborating with influencers of varying followings to reach different audiences who haven't been exposed to your brand before.
Make sure that your partnerships make sense though. Find influencers with brands and themes that align with your own.
15. Be the Best at What You Do.
This is honestly the best way to get quality referrals. No one can deny or ignore excellent service and amazing quality.
When you're delivering quality products or services to your consumers, it really isn't that hard to ask for a referral, review, or endorsement.
Always be on the lookout for new ways to improve your business and continually delight your customers.
How Do You Plan on Building Referrals to Boost Your Business?
Many people feel like referral business is just the luck of the draw. If you have it, great, but it’s not something you can control.
It’s true that getting a referral is the end product of a lot of small interactions. But still, you don’t have to sit back and wait for the stars to align.
By being proactive in how you manage the customer relationship, you can motivate a fraction of your customers to consistently notice and take action when your solutions are the order of the day.
That will give you a stream of leads who may be predisposed to like what you have to offer, providing you with a much shorter sales cycle.
It’s like they say – you can’t direct the wind, but you can adjust your sails.