Referrals are the most effective and cost-efficient way to grow your business. I have several books on my recommended reading list that explain this further, but you don’t need a whole book to learn how to get more referrals for your business. Here’s the basic breakdown:
The acquisition costs of attracting new clients are five times more expensive than harvesting recommendations from your current clients. You don’t have to spend time building trust with new customers: they already trust their friends and relatives who refer them. You’re saving time, money, and energy while creating a reliable client base with referrals.
On top of that, think about the lifetime value of your clients beyond the first year. If your customer buys $1,000 worth of product per year and stays with you for five years, consider how this figure will increase if they bring on their friends, family, or colleagues. You can capitalize on this value immediately if you get more referrals now.
It can feel awkward to ask for referrals, but ultimately, people want to buy from businesses that others endorse. Everyone wants to do what the cool kids are doing (social proof), and if their friends or respected colleagues recommend a product or service, they’re much more likely to rely on that than to seek out a new, untried company to work with.
The first step in increasing referrals for your business is to incentivize your clients to refer others to you. As this article from Inc. suggests, asking for referrals without offering anything in return is uncomfortable because it feels like you’re asking for a favor. If you give them something of value in return, you’re suddenly doing them a favor.
This typically involves offering a deal where, if the client successfully refers a friend, they receive preferential treatment or a premium offer. You can also create some products to share, such as a booklet or work samples. To generate more referrals now, you want to offer something of value that establishes your business’s identity.
After that, it’s all about how and when you ask. Make it clear from the outset that you appreciate and reward referrals. You should add this to your website and whatever product or offer you give in return.
You can even make this part of your agreement with the client by letting them know you’re looking for referrals for a job well done. Referrals are usually more vital and natural to harvest earlier in the relationship, so don’t be afraid to ask earlier than you’d imagine.
One way to get more referrals is by providing a sheet for clients to write down anyone they know who might be interested in your product or service. Could you ask for more referrals than you initially expect to receive? If you ask for three, you’ll get one. If you ask for one, you’ll get none.
It would be helpful if, depending on your relationship with the client, you followed up with a call, email, or text. Something as simple as “I enjoyed working with you. If you know anyone interested in our product/service, I’d appreciate it if you could send them my contact information.” To generate more referrals now, you must be proactive.
Finally, make asking for referrals a natural part of your business process. Reach out to past clients to tap into their network for potential clients, and approach every networking opportunity as an opportunity to solicit more. If you make it a habit to seek out referrals, your business will blossom in return.
You may want more referrals now, but you might still wonder what that looks like for your business. I can coach you through the process of harvesting referrals from your clients. Click here, and let’s schedule a video call to discuss increasing referrals for your business.
Coach Dave
As AI technology advances daily, small business owners must think strategically about how and when…
Small business copyright is a form of legal protection for original creative works produced by…
There comes a point in the lifespan of every organization when you outgrow the systems…
Often, the secret to an innovative business lies in a visionary leader. Visionaries are usually…
Resistance to change is a phenomenon as old as time itself. When you think about…
Change management during mergers and acquisitions is an art and a science. Many leaders understand…