For a lot of small businesses, referrals are one of the most important ways of generating business.
Frequently clients tell us that most of their business come from referrals and a lot of them have referral schemes in place to help maximise this.
The thing is, sometimes people don’t see referrals as marketing, we’ve even had people tell us in the past…
“We don’t do any marketing, all our business comes through Word of Mouth.”
That’s crazy to think. You think all those people referred you for no good reason? There’s a reason people refer business, and you might not mean to be doing marketing, but if you are sustaining a business with just Word of Mouth, you are doing pretty well at it! 🙂
Because all businesses can make themselves more ‘referable’ with a bit of work, and many businesses have very successful ‘referral schemes’ in place to encourage referrals, these aren’t necessary to grow with Word of Mouth, but they can work. So, whether you do or do not have an official ‘scheme’ in place, this article is intended to give you some pointers to help you get more referrals for your small business.
1. Everybody benefits
There’s 3 people in a referral scheme
The business, the referrer (the person doing the referring), and the referral (the person being referred). All these people need to get benefit out of the transaction. For the business, the benefit is easy – more business. For the referral you need to give them a reason to use your product and service, thinking of the benefits of purchase or the problems solved. The hardest part we find most businesses struggle with, is showing the referrer the benefit of referring, which leads us to…
2. Have a good reward
The referrer needs a good reason to refer somebody to you. Getting X% off their next purchase isn’t really the most enticing of offers unfortunately, as it means they have to spend more to receive any type of reward. It needs to be something impressive, something they really really want. A £100 voucher for a store of their choice sounds nice, a £500 voucher even better, but obviously this depends on how much the referral is worth for you. Having a choice of ‘rewards’ is always a good idea too, not everybody is the same, so this increases the amount of people you can entice with a referral scheme.
We should also mention at this point too, that the reward needn’t be a monetary thing. People aren’t always motivated by money, but everybody wants to look good and help people, so how about instead of offering a monetary value, say if you refer somebody to us, we’ll give that person X% off our service? The business looks good, the referral gets money off a service they need, and the referrer looks good in the eyes of the referral – everybody wins, and everybody benefits.
Don’t always think money when it comes to a reward, as in some cases people might feel sleezy taking money, and be put of referring.
3. Natural referrals should be rewarded too
Not all referrals are going to come through a scheme, if you do a good enough job, your clients will pass on the good word. Don’t forget about these people, as these are your BEST referrers. They obviously haven’t referred somebody for the reward, but let them know how much you appreciate it, either by phone or email, or a nice touch we have used in the past is by sending something through the post. A handwritten note or box of chocolates are good easy options.
4. Make it part of your system
Keeping up with a referral program is hard work, so put it into your diary, and get into a regular habit of rewarding and keeping track of referrals. This will make it easier in the long run.
5. Keep it simple and make it clear
Make sure you can explain the benefits of your scheme easily and concisely, so people understand it straight away. Remember you need to be able to explain the benefits that both the referrer and referral will get. Also, make it explicitly clear who you want to actually be referred too. The more clear you are about your target market the easier it will be to make a referral to you. “I want to be introduced to businesses who want to grow” is not very specific! It is worth telling your clients what kind of business you are after, and from whom. “I want to be introduced to Accountancy practises who employ less than 5 people” is much better.
6. Referral schemes don’t end at purchase
Last but not least – remember referral schemes are ever growing entity. Once you seal the deal with somebody, that transaction is not over. That client is now a potential referrer of your service, so aim to impress, make sure they know you do business by referral, make it clear who you want to be introduced to, and explain how everybody can benefit.
ACTION: Do you have a referral scheme? If so mark it against these 6 points, and see if there are any ways you can improve.
ACTION: If you don’t have a referral scheme, then think about how you could implement one using the above methods.
ACTION: If you don’t want a referral scheme (some don’t), still take these points on board, especially the point about rewarding natural referrals, to get referrals for your small business more frequently and more easily.