For those of us providing some type of service for a living (and that’s 84% of businesses in the US), referrals can be the fuel that fires the engine of growth. The choice to become a customer is rooted in trust. When it comes to figuring out who we can rely on, most of us will place our business in the hands of someone recommended by a friend versus a complete stranger.
In fact, a recent study revealed that 90% of customers claim positive reviews influence their buying decisions, while 86% of people admit negative reviews push their choices in another direction.
If you think about it for just a few seconds, you can probably recall a time when review sites like Yelp helped you make a decision on dinner or customer reviews on Amazon boosted your confidence in purchasing a product. It’s no coincidence that referral-based groups such as Business Networking International (BNI) draw members all over the globe.
So even though it’s true that this advice to “go get more referrals” is familiar (if not tired), why is it that most entrepreneurs sheepishly admit they don’t do a great job asking their clients to recommend them to friends?
Without a doubt the answer comes down to the fact that asking a customer to refer friends to us (and put themselves on the line with a recommendation) can feel uncomfortable and awkward, particularly if you don’t practice. Not unlike shooting hoops from the free throw line or composing poetry, building a business that runs on referrals is a skill that takes honing, a muscle that requires regular flexing.
It might sound like overly simple advice, but most service providers just need to ask more often.
But if you feel like you are asking and you still aren’t satisfied with the results of your word of mouth marketing, it’s nearly guaranteed that you’re committing one huge mistake: you are waiting too long to ask for the referral.
In general, it is common for a freelancer or service provider to wait until the end of the relationship with a customer before asking for help with referrals. Perhaps we feel a need to prove that we are worth recommending, as though we haven’t earned the right to ask for extra business until the job is done. There are many problems with waiting this long to ask for a referral, and chief among them is the fact that this strategy drastically narrows your opportunities to look for chances to land a positive review.
The easiest way to increase your odds of landing a referral is to broaden the scope of who you’re asking. First and foremost, many entrepreneurs watch their referral rates sky rocket when they choose to ditch the belief that someone has to actually become a customer before becoming a source of referrals.
Referrals are hiding in every first conversation
Here’s the one simple tip to getting more referrals: Treat every first conversation with a potential client as a referral opportunity — regardless of whether that person becomes a client.
“Treat every first conversation with a potential client as a referral opportunity.”
That’s right, you don’t have to miss out on a referral opportunity just because someone chooses not to work with you.
Let’s assume you run a health coaching business geared towards professional women who want to stay fit despite their busy schedules, and you offer a free discovery session as part of your sales process. Here are a couple examples of how you can work this into a first conversation, whether or not you and the prospect are continuing your relationship:
“No, not at this time”:
“I totally understand the timing isn’t right for us to work together right now, but I’m glad we had this mini session together to discuss a few health tips you can implement right away. Even though we won’t be working together, I’m wondering if you can think of any friends I might be able to help with a free session like this one. If so, would you be open to connecting me?”
“Yes, I want to work together”:
“I’m so excited you’ve decided to take this big step towards a healthier lifestyle, and I can’t wait to get started. Before we begin, I’m wondering if you know anyone else who might be looking for quick & easy ways to get healthier. Would you be open to introducing me to a few friends who might be interested in my tips?”
In either case you’ve set yourself up to connect with new prospects, opening doors that would have remained firmly shut had you not asked.
While asking for referrals earlier is perhaps the easiest way to increase your shot at a new client, here are a few bonus strategies you can implement to make this process even more natural.
Make your referrer a hero
If you re-read the talking points from our health coaching example, you might notice this entrepreneur isn’t exactly asking, “Who do you know that will work with me?” Instead, she is asking who she might be able to help with some healthy tips or a free session.
With this simple tweak, you give the referrer a better reason to reach out: with something helpful and interesting, not a sales pitch. There are lots of ways to be inventive here — in the health coach example, she could offer to include a free “quick recipes” ebook as part of the introduction.
Use a compliment as a springboard
You know those magical moments you have during a session with a client when something starts to click? You can sense a breakthrough is happening and he says, “Wow, this makes a huge difference” or “this is exactly what I’ve been looking for!” Perhaps if you are a freelance website designer you show a client a mockup and receive a giddy response, letting you know that you’ve nailed it. While your customer is riding high, that’s a great opportunity to find out who else they know that you can help.
Do the introduction work
It’s completely possible that your clients want to connect you with referrals, but as busy people their never-ending to do lists prevent them from sitting down to write that introductory email.
Once a referrer agrees to put you in touch with someone she knows, you can offer to send a short introductory template for her to use if it’s easier for her. If you do put together a template, keep it short and avoid selling your services. Here’s an example of a simple email your client could send on your behalf:
I hope all is well with you! I wanted to drop you a line because recently I’ve gotten to know Jane Doe. She’s a health coach who helps women with busy schedules make their health and fitness a priority with an emphasis on “quick & easy”.
I know you are interested in health and fitness, so I thought it was only natural to connect you. I’ll let you two take it from here!
P.S. Jane has an awesome ebook that includes quick & tasty recipes, and since you’re a friend of mine she welcomed me to pass it along. Here’s a link!
In this example, the template can be used verbatim or it can merely serve as a starting point for the person sending the email. The key here is that you make the process as easy as possible for the person who has agreed to recommend you.
Incentivize referrals with a creative approach
If you really want to make significant strides in growing your referral business, you could come up with a special offer that benefits both the referrer and her network. To use our health coaching example, you could create a special group coaching package for your client and three of her friends, giving them the ability to split the rate amongst them or work with you at a discount.
Personal styling & clothing delivery service Stitch Fix has created an excellent referral program in which both the referrer and the new customer receive $25 off their next orders when a custom link is shared. In this case the customer spreading the word about a product has an excellent reason to do so: she gets to offer her friends a special discount on a service she loves, and in the process she gets to collect a little for herself. Stitch Fix gains a new customer while deepening their relationship with the existing one, and everyone wins.
Give clients the star treatment
Of course, as a service provider who is proud of your business, you undoubtedly realize you should do the best you can to give your customers an amazing experience. While we know this, it can be easy to lose sight of the importance of going above and beyond once we’ve secured a relationship with a client. The customer might be difficult, peppering you with extra demands, or you might just feel overwhelmed under the pressure of your growing business.
While these circumstances are completely normal, remember that every single interaction with your customers is an opportunity to bolster your referral business. By looking for ways to surprise your customers with delight, you might just end up with raving fans who can’t shut up about you (look no further than the Zappos pizza story to confirm this.)
Be a connector
You know that person in your life who just seems to know everybody and, even more amazingly, always seems to be going the extra mile to introduce people who might enjoy getting to know one another? I have a friend like this in my life. She has sent countless emails introducing me to people who I could help or who might help me, many of them unprompted and out of the goodness of her heart. It’s something I always think about, and any time she has called in a favor with me I’ve gone out of my way to make it happen for her. Make it your goal to be that person, the one who has built so much goodwill within your network that your contacts are practically clammering to help you out.
“A candle loses nothing by lighting another candle. Help others and watch your referrals grow.”
If someone goes out of his way to refer you, be sure to reach out to the new contact within 24 hours to avoid letting the lead grow cold. Also, don’t forget to thank your referrer for making the connection — consider going above and beyond with a handwritten thank you note or creative, small token to say “thanks”. A referral is truly a gift to your business, it’s the least you can do to properly thank the person who made it happen!
The Top 10 Mistakes in Online Business
Every week we talk with entrepreneurs. We talk about what’s working and what isn’t. We talk about successes and failures. We spend time with complete newbies, seasoned veterans, and everything in between.
One topic that comes up over and over again with both groups is mistakes made in starting businesses. Newbies love to learn about mistakes so they can avoid them. Veterans love to talk about what they wish they had known when starting out.
These conversations have been fascinating, so we compiled a list of the 10 mistakes we hear most often into a nifty lil' guide. Get the 10 Most Common Mistakes in Starting an Online Business here »