Use a Client Referral System to Grow Your Business

Referral SystemWhat’s more powerful than how great you say you are? How great others say you are.  I know a local small business owner who runs his business solely on referrals. He, of course, has to hold up his end of the bargain and provide outstanding service, and he does, but he doesn’t spend a dime on advertising.

How good is his referral system? He doesn’t have a website and doesn’t use social media. Can you imagine?!  While it will certainly make it hard to sell his business or pass it along to a family member, it speaks volumes about him personally, and the quality of service he offers.

Referrals can serve as a volunteer sales team that will provide a much greater return than cold calling. Here is a look at what options you have:

1. Reach out to your existing clients for referrals.  

If you have been in business for a while, then you have clients who like what you’ve done. Touch base with them on a regular basis, and ask them if they can help refer you to others. With this strategy, consider a 4-1-1 approach. For every six times you contact them, whether via email or phone, four times you will send along helpful information, one time you will send an update about yourself and your business, and one time you will ask them for a referral.

2. Build a referral partner network.

My strategic business coach, Jackie Nagel of Synnovatia, leads a private referral networking group. She’s convened a group of trusted service providers who all serve the small business arena.  It’s called Virtually Anywhere and we meet weekly.  The calls are wonderful, as each week a group member presents about their specialty, which helps us all to learn something new. It also helps us learn more about them as a provider and gives us the opportunity to evaluate their expertise.  After the presentation, we share about referrals that we are seeking and give updates on referrals we have been given.  Networks like these allow me to broaden my service offerings and partner with other members.

3. Promote your referral network.

If you have a group of businesses that refers business to you, or could refer to you, consider creating a designated page on your business website to help refer their businesses.  Label it something like partners we trust or businesses we trust and share about each business.  Consider a mortgage broker as an example.  A broker’s referral list would be made up of real estate agents, home builders, design firms, and others relating to owning a home and needing financing. While you’re driving business to others, you will be top-of-mind when they make a referral.

A good referral plan is highly targeted and gives you access to more of your ideal clients. It’s the most valuable form of marketing and it should be treated as such. If you are blessed enough to be given a referral, here are a few things you need to do:

1.  Contact them immediately.  

Someone has gone to bat for you, reach out to the referral as quickly as possible.

2.  Send a thank you to the referrer.

Again, someone has gone to bat for you. As soon as you finish contacting the referral, send a thank you to the kind soul who referred you.

3. Have a plan for when a referral isn’t a good fit.

Not all referrals will work with your business model. Have a plan that includes other suggestions and alternatives for times when you aren’t able to work with a referral.

4.  Track your referrals.

Keep your contacts up to date on the progress of the referral. For partners that send a lot of business your way, consider an incentive, or focusing on referrals for them.

The best way to start a referral system is to become one yourself.  Who in your list of contacts can you help today?