ESPECIALLY FOR COMPANIES that sell products or services to other businesses, there is no more efficient way to generate new business than through referrals from happy existing customers. If a happy client refers his friends, trust has already been built into the equation, which generally shortens the sales cycle. Additionally, there is typically very little cost associated with generating new business through referrals. Why don’t businesses rely on referral generation more heavily? It usually boils down to fear. Some people are afraid of appearing too “salesy;” others are afraid of seeming desperate for work. Some professionals just lack confidence, and they aren’t sure that they deserve the referral. If your confidence is the problem, you have to adjust your own mindset first. No business delivers complete perfection every time. Be fair to yourself, and make sure that your expectations for your business are realistic. If you still lack confidence, you may have some service opportunities. The most straightforward method for course correcting begins with asking customers what you could do to more fully deliver on their expectations. Once you believe you’ve earned the right to ask for referrals, there are six easy ways to make referral generation a natural part of your relationship-building process with current clients. Make sure you’re having quarterly conversations with each of your customers, asking about what makes your company better than the competition, what you should do more often, and what you should stop doing. Tell them how you’re going to act on that feedback.
Next, explain that you’re looking to grow your business. Name five specific businesses that you think could benefit most from doing business with your company, and explain your reasoning. Make it easy for your customers to refer business to you. Teach them how to talk about your business by giving them insight into your elevator pitch. Treat vendors and suppliers as partners, and actively refer business their way. If you send business to them, they will probably do the same for you. Set the expectation for referrals upfront by telling new customers you intend to exceed their service expectations and that your business relies heavily on referrals. Consider offering a referral incentive to customers for a limited time. If the incentive is open-ended, customers may file the offer away in the back of their minds, waiting for an opportunity to arise, ultimately forgetting entirely. Deadlines create a sense of urgency. Explain how you would like to receive referrals. If your request is vague, your customer might think that the referral seems like too much work. Instead, keep the ball in your court. You might say, “I will send you a template of an email that you can customize before you send it to the prospect. Be sure to CC me. I’ll take it from there.” When a customer does refer a prospect your way, be sure to follow up with a phone call — or even an old-fashioned handwritten thank-you note.
