How To Increase Your Business Sales By Giving more Referrals.
What you are about to read will significantly increase your company’s sales. I am writing it because referrals represent the largest bucket of new sales acquisition for many small and medium businesses, and are the most difficult thing to increase in volume. We all love them, and can’t seem to generate enough of them. First a short background on why we think referral programs are both important and generally are complete implemented in the wrong way.
One of our services to clients besides Internet Marketing and Search Engine Optimization is a
Sales Crystal Ball program. It falls in the category of sales acceleration. In its basic form, the final product will tell a business where its next 12 months of customers will come from, and how to sell them in half the time.
To accomplish this we look at a large data set of former customers. With in that data we find the largest commonality matches. Those of course turn into a target market. A message based on the findings ofwhy former customers purchased, is developed and then delivered to the new target market.
As an example, we recently finished a Crystal Ball program for a client that clearly identified that 90% of what they had described as their best customers were all part of one organization. The vast majority of their best customers
had 6 or more employees and the vast majority of those had been in business 10 years or more. The new target market was very defined and easy to identify.
Here is where finding new clients becomes a challenge, as most of the clients customers in the above crystal ball assessment came from referrals, and this is the case with most of the businesses we work with. When assessing where new clients find them, the number one (by far) way is almost always through a referral. This is really a good sign as it demonstrates the company does great work. The problem is if you want to build new sales at an accelerated rate you can not just wait for someone to refer you, and most referral systems you can build have a limited success rate, although certainly worth the effort to develop.
Here is why a referral program doesn’t build sales quickly. Its premise is an anti altruistic tit for tat system.In other words you ask for something before you give.
A tit for tat system is simple. I give you something that is valuable, and you feel the need to return the kindness.
In a referral system, you are saying, give me something and I will be thankful, or I will give you a reward. In human nature, that’s a turn off (There are a few exceptions to this rule of course).
To have a truly successful referral program, you must reverse the tit for tat process. You must start the system by giving the customer a gift or help of some sort that has real and unique value. Value has a tendency to be returned in equal or higher quantities. This value you give needs to be a surprise, not baked into a system.
A personal example of the power of a tit for tat system is when your neighbors drop off some home baked cookies before the holidays. They just show up and hand you a gift with a smile. Soon you may find yourself baking a batch for them, or returning the kindness in some other way, but chances are it will be cookies or food. This point is very important. Tit for tat values are generally the same stuff given back and forth.
A business example: B2B
If you want other business to promote your service, you must first, promote their business. If you really want a business to refer you, you need to refer them first!
So it all comes down to this when we discuss referral programs. Instead of building a “we will give you something for a referral”, you need to build an internal process and culture that says, we will give our customers referrals. Then you need to actively find those opportunities. If your sales person(s) can find an honest way to refer one prospect to your better clients a week, you will be pleasantly surprised at the effect it will have on your sales. Even better is to find a way to constantly promote your best clients, so there is an ongoing process of giving.
How to start:
- Make a list of all of your better clients.
- Next to the company note the services or products they sell.
- Next to that, add a note of the clients or associates who might need or purchase their services in the future.
- Now make a list of introductions you can make.
You see where this goes. You can send an email to both parties as an e introduction. You can call them and introduce the other party. You can set up a lunch for them to meet each other. You can hold a quarterly networking meeting for all the clients.
Another system is to develop an ongoing promotional program on your site, or in your newsletter, that allows you to promote your best clients. Call them and ask if they would like to be listed or promoted through those opportunities. If you are really into this, you can even add some ad words PPC to drive some traffic to the resource page on your site, using the clients keywords.
There are as many ways to provide referrals to your clients as there are ways to promote a business. Be creative and give first, and do not make this process public or part of a sales presentation.
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SEOmoz talks about this in a how to get links article here http://www.seomoz.org/blog/my-favorite-way-to-get-links-and-social-shares-whiteboard-friday