When it comes to small business marketing getting referrals is a huge part of the profit game.
Referrals are inexpensive to obtain and easier to sell to. You don’t have to place a huge ad in a high-dollar newspaper to find referrals, so referred clients are inexpensive to come by. And since you don’t have to spend as much time building up trust and explaining how your process works, referred clients are easier to sell to.
It all sounds easy enough, but getting referrals can actually be quite difficult for many small business owners. While there are a few wonder women and men out there who seem to never lack in referred clients, most entrepreneurs struggle with this part of the sales process.
If you struggle to get referrals for your own small business, here are several mistakes that you should avoid.
Mistake #1: Not asking for referrals
The biggest mistake that many small business owners make is not asking for referrals. Do not be afraid to ask. The best place to start is with your current customers. Choose 2 or 3 clients that you would like to duplicate, and ask those clients if they know anyone they can refer you too. The hardest part of getting referrals for most business men and women is finding them. They don’t just drop out of the clear blue sky; you have to ask in order to receive.
Furthermore, don’t be afraid to ask more than once. Don’t be surprised if the first time you ask for a referral your clients don’t have any names available for you. Many people who say they don’t know anyone the first time you ask may surprise you by having a name for you the second time. If you are polite and not pushy about it your customers will not be upset if you ask again, and they will probably come to you on their own if they find someone they believe could use your services.
Mistake #2: Being too vague in your referral request
Do not ask passively for referrals. Many small business owners do this out of fear. They say something like “If you ever happen to find anyone who might benefit from my services, please let me know” or “Don’t forget to refer your friends”. This almost never ends up in a referral.
You need to be extremely specific in your request for referrals. After all, if you don’t know who you’re looking for, how are your customers supposed to know. Rephrase your request into “If you know any homeowners who purchased a house in the Lexington neighborhood within the past 9 months, I’d love to offer them our roofing inspection. Please forward their names to me so I can help them out.” This is a lot more direct and to the point. It is a lot more likely to get results. People appreciate honesty. Beating around the bush is almost never a good idea when it comes to sales.
Mistake #3: Not using an incentive for referrals
Coming up with a good reason for your clients to spread your name around is a great way to get referrals. Offering money for referrals is a sticky situation, and only you can decide whether you want your incentive to be monetary or not. But there are other things you can offer, like a free add-on service or a discounted support program. Or you can create a special service or product that is only available to clients who provide referrals.
If you set up an enticing incentive program for your customers and clientele you are far more likely to get referrals because they see the reward in it. Instead of taking the “help me out” approach try the “let me help you out” approach.
Mistake #4: Using the telemarketing approach
Once you finally have some referral names in hand, instead of simply picking up the phone and calling with a sales pitch you are better off trying a less aggressive approach. Try to arrange an in-person meeting between you, the referral and the client who referred him/her. If that’s not possible, a personal introductory email or note can be much more effective. Get permission to use the name of the client you received the referral from. Explain why your client thought you would be a good match and give details of the type of service you can offer. Do your homework and find out as much about the referral as you can. Instead of approaching the referral with a “what can I do for you” question, present yourself as the expert with a “here’s how I can help” statement.
Most entrepreneurs would agree that referrals are an excellent tool to add to your small business marketing plan. With a little effort and a little planning, you can avoid these mistakes in your own referral marketing program.
How important are referrals to your business? What are the best ways you have found to get them? Do leave your comments.