Using a Referral Program to Increase Sales
One popular technique for acquiring new business is through a referral program. Building a sales pipeline through referral business can be instant sales. Why is there value to referral business?
Referrals are usually from someone you know – Once a satisfied customer tells another person or business about your services, your sales cycle is much shorter. Word of mouth is the best advertising available with the highest conversion rates.
Referrals are more cost effective – We don’t have to advertise for referrals. This is generally done for us during a casual conversation. A sales team has a full line of expenses, while a referral from a satisfied customer has no cost.
Referrals allow you to showcase your business – Satisfied clients are the strongest sales force available. Claims from existing clients carry instant credibility and may require little follow-up.
How do you gain new referrals?
• Clients – If your client is happy, ask them to share their experience with their colleagues, friends, or family. When clients mention how beneficial your services have been to them, the referral is much more likely to do business with you.
• Friends – Our circle of friends can be a tremendous source of business. Our friends understand our ideal customer or client profile; they’re better able to provide prospective referrals of interested prospects.
• Future clients – Listen for ideal opportunities to talk about your business. You may have the opportunity to talk about your offerings to someone that may not be in the market for themselves but know of someone that is. This would give you a referral for future customers.
• Vendors – Building strong business relationships with vendors can result in a substantial referral business. Many businesses will take the advice of a supplier due to familiarity of the offerings that are being sought and depending on your relationship with the vendor, may also refer new clients to you.
Some companies also offer financial incentives for referrals that turn into new business. Offer gift cards to restaurants or discount coupons to those that assist with the referral process. Referrals are more likely to remember those that showed appreciation.
Look at everyone you meet as a potential source for referrals. Casual or business, any of your existing relationships can generate new referral business.