We’d all like simple yet effective ways to grow our customer base, especially if we can attract quality clients on autopilot. One technique which can lead to some of the best business for your agency is to develop a referral strategy.
Referral customers tend to come at much lower cost and often stick around longer. Consider these stats compiled by Social Annex:
- People are four times more likely to buy when referred by a friend.
- 92% of customers trust referrals from people they know.
- The lifetime value of a new referral customer is 16% higher than your average customer.
If you would like to harness the power of referrals for your business, establishing strong credibility is your first step. We like to refer our friends and acquaintances to people whom we truly trust; someone who we think will take care of them and not damage our own reputation for giving the referral. This is why reputation comes before referrals.
Considering a rewards for referrals program? Check out our tips here.
If you’re a relatively new business, you’re not going to have the kind of street cred that gets you referrals right out of the gate, unless your own or a co-founder’s reputation is already well-established through previous experience.
Reputation begins with both standards and awareness. You need to ensure you have set high standards for your work and customer service, but you also need to monitor and be aware of how your business is perceived by others.
There are a few ways you can be monitoring the reputation of your business:
- Set up alerts using tools such as Mention or Google Alerts. Monitor your brand name, your name and any other relevant keywords.
- Ask your clients. Whether you send out a survey or pick up the phone, it’s important that you keep a handle on how current clients see you.
- Be both proactive and interactive. Respond on social media, ask questions and engage with your audience.
The word “authentic” tends to get a bit overused, but ignore the corporate buzzword grandiloquence and look at what that really means coming from your business.
There are a number of elements that can communicate authenticity to your clients and prospects. For example: transparency, developing a unique brand “voice”, reacting to any negative feedback in appropriate, genuine ways without trying to cover it up, and, of course, delivering on the promises you make.
Another marker of authenticity is to ensure that everything your business puts out, whether it’s content, comments on social media or your project deliverables, meets a consistent set of standards for quality. You don’t want awesome client work but sloppy blog posts, or worse, sloppy client work but carefully managed social media.
So reputation in a nutshell: set high standards, monitor your reputation, be authentic and be consistent. If you can answer yes to these things and you’re receiving positive feedback, then you may be ready to put a referral strategy to work.
Building Your Referral Strategy
An important thing to remember about any referral strategy is that you shouldn’t expect rapid success. Most claims out there that “this strategy will flood you with business overnight” are utter B.S., or may only work for a select few.
Success comes from all of those small steps which you take often. This might mean setting a certain amount of time aside every week just to work on referral strategy, or it might mean boosting your networking activities through attending conferences, masterminds or local group meetings.
Importantly, a successful referral strategy comes from having a plan to follow and taking regular action.
A successful referral strategy comes from small steps, taken often.
#1. What type of strategy?
You could go for any of a number of referral types, but the important thing is choosing the kind that can be implemented effectively in a business strategy.
Here are three to consider:
Experience-based – Simply the referral of clients to you by clients who have worked with and speak highly of you.
Referral Partners – Relationships with other people or businesses who refer to you. These are often reciprocal in return for your referrals or some other benefit you provide. Usually you will have similar client bases, but be in complementary businesses.
Rewards programs – This could take the form of an affiliate program, where you offer compensation in return for the referral, or it could be another type of reward such as discounts or freebies within your business. (For example, Dropbox offers additional free storage space in return for referrals).
#2. Set Goals
For any type of business strategy to be successful, you need to know what success looks like. Set specific, measurable goals for your chosen referral program/s so that you’re able to quantify whether it is working.
#3. Build Good Relationships
Relationships are the basis of any kind of referral. As we mentioned earlier, no one wants to refer their friend to a business they’re not sure about. No matter what type of referral program you’re looking at, the relationships you build will be your key to success.
For example, make yourself known as a “being there” type of business who is prepared to offer help promptly when needed by clients. Keep up regular communication with them, even outside of any current projects, and get to know them on a more personal level.
In the case of any partnership, nurture the relationship by staying in regular contact and helping them out when needed. Make sure you are referring clients to them regularly – reciprocity can be a good motivator.
For any reward or affiliate members, don’t let them slip through the cracks. Keep up regular contact and make their relationship with you worthwhile. This means that rewards should be meaningful and relevant, but at the same time you should offer support to help them help you.
#4. Identify And Nurture Top Clients
It’s true, you should be looking after every client you have well, but it’s also true that you will have some who are bigger fans, give you more business or are exceptionally well-connected. It’s an old strategy to single out top clients and give them special treatment (lunches or golf, anyone?), but doing so can prove valuable to your business.
Assuming your agency is a digital-based business and doesn’t necessarily meet up with clients in-person, there are other ideas for nurturing from a distance:
- Thank you cards.
- Surprise them with a gift. (It could even be a minor update that you’ve noticed they need for free).
- Be proactive. Anticipate early when they may need something.
- Mention them in content you are creating if you have a relevant context.
- Provide them with referrals or valuable information.
#5. Share Stories
Have you got any raving fans who have received great benefit from the work you do? Record their stories and get permission to share on your website and in any other media property you have. The more widely you circulate these stories, the more likely you are to strike prospects who know the people you are sharing about, and they may approach them about you.
#6. Follow Up
One of the places where many agencies fall down is in following up with clients and asking for referrals at appropriate times. (It’s surprising how many don’t ask – the thought of referring often hasn’t crossed your client’s mind until you mention it).
When is an appropriate time to ask for referral business? Generally after you’ve built a good relationship with the client and have provided them with something of value. Asking at the close of the deal has been talked about, but tends to be too aggressive. Clients need time to develop experience with you and have confidence in the work you produce.
#7. Thank Them
When a new client is successfully referred to you by someone else, adhere to common courtesy and give your thanks to the referrer. Everyone likes to be appreciated, so show them that you do. Write a note, send chocolates, give them tickets to their favorite band – just do something to acknowledge the service they have provided you.
Another important point about this is that people want to know whether or not the referral they made was successful. Keep them in the loop and they’ll be more likely to send you more referrals.
Considering a rewards for referrals program? Check out our tips here.
Referrals can be a powerful source of quality clientele for your agency. A prospect referred by someone whom they know and trust tends to stay longer and bring greater lifetime value.
A robust referral strategy starts with having an impeccable reputation to tap into. You need to be monitoring the sentiment about your business and uphold high standards with transparency.
Finally, successful referrals begin and end with relationships. Be a networker. Be a relationship nurturer. Provide value to others so that they feel compelled to refer you more business.