This is the second of three pieces to help you generate quality referrals. Now we're getting into the fun part, the how part, the show-me-so-I-can-make-it-happen part.
1. Institute a formal referral program. Measurable results start here. There is absolutely no substitute for having a structured program with incentives in place to encourage your customers to refer you. You must stay on top of mind. For a good example of this, think about your real estate agent. She knows that referrals are a major part of her business. They are always incentivizing by giving away restaurant and movie certificates and other gifts. They know home buyers have plenty of options--though that profession is a bit less bloated right about now--and understand the value of being at the fore of our thinking.
Define what the program “payout” will be based on the sale that’s closed. The amount of money you spend on a referral program should be consistent with the dollar value of what you’re selling. If you’re a low margin reseller, the referral gift will be very different than if you’re making product sales of $50K and up. It's important to pick a referral gift that is to scale.
As for the payout, except for rare occasions, it’s recommended to only give these referrals gifts upon close of the sale. Otherwise, a hearty thanks will do for on-target leads.
2. Look outside your customer base. The program should apply to more than your current customers. You should also open it to past customers, as well as business partners and other colleagues. Anyone who has interaction with prospects you’d like to add to your roster is a candidate for the program. If you have a board of directors, they should be bringing you leads. If they’re not, find out why.
3. Promote the program. Without promotion, your referral program is like a tree falling in the woods. Your customers and partners won’t always be thinking of you. They certainly won’t go out of their way to identify opportunities to bring you business. But if they respect your organization, know you appreciate referrals and have incentives for bringing you good ones, then you are on the right track.
It’s essential to continually remind clients and partners of your services and value proposition. Tell them you value their referrals. You can promote the program through newsletters, invoice mailers, special direct mailers, or when sales reps or project managers meet with your customers. Special events to thank customers for their business are a powerful way to build good will and encourage them to provide you with qualified leads.
Have any of these approaches worked for you? Have you had success with others? Later this week, I'll have three more ways you can get more quality referrals, so don't go too far away.
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