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Why getting referrals isn't really about you

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When customers refer your product or service to their friends, what is this really about? They have put their credibility on the line, they’ve made an effort to help save their friends time and possibly money, and they are helping someone else make a better choice.

All this for you or for the small reward that you may send their way? Not really. Customers rarely make referrals to help a business. They make them because they want to bring value to their friends and be useful to their social connections.

So, if your referral strategy is centered on simply going around asking customers for referrals, it’s time to rethink things.  You may win a few leads or even a few customers, but these tactics rarely scale and you’re essentially missing the point. Customers make referrals to help their friends, not you.

A truly profitable and scalable referral strategy is about connecting customers and enabling them to share what is already a good experience. For many service professionals and marketers, this means a resetting of expectations and tactics. Consider these basic tips and some effective approaches.

Connect customers. It’s obvious that people are more connected via digital channels. But simply gathering countless likes on Facebook or Yelp reviews is going to do little to spur customer advocacy. You need to connect with new customers at the time of need. If someone in New York City is looking for an insurance agent and one of your existing customers is known to them, they should be able to discover each other easily. There is nothing more powerful than knowing that their friend has endorsed your service when they are looking for a similar service.

Engage, don’t sell. The way you word and present your request is critical. Here’s an example: A large insurance agency was smart enough to touch base with their customers and ask why they were not referring friends. They learned that customers felt the referral program was a marketing gimmick. They felt odd about sharing something for a freebie. With this information, the company re-launched the program showcasing tips from actual customers on how they manage their insurance needs. They asked their customers to share this with their friends. The program was a raging success and the company later thanked each customer with a gift as a token of appreciation. They spread the word and established loyalty.

Make the experience quick and pleasant. If it takes anything more than a few minutes to make a referral, no one is taking the trouble to do it, no matter how much they like your service or product. The days of long testimonials tucked away somewhere on your website are passé. Make sure you have the tools that make the customer’s experience as easy as possible and enable you to track and recognize their effort.

Find out your influencers. Your customers are your advocates. You want to zero in on the ones that pull the most for your business. Nothing tells you more about your customers than their actions. Every click is a decision with underlying intent. With the help of analytics tools, you can find out which consumers are driving the most business and identify gaps that maybe prevents others from doing so. For example, a good referral platform can tell you if customers prefer email or social channels to spread the word, and what kind of messages are more successful than others.

Generating referrals is as much art as it is science. The key is to enable yourself and your customers to spread the value. Referrals are money. Use them wisely. 

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