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Winning Customer Referrals: Your Key to Successful Leads

Customer referrals offer the best of both worlds: you have lots of current customers who love you and they recommend your business to new prospective customers.

This is easier to accomplish than you might think with some planning on your part, and with strategic use of your CRM (Customer Relationship Management) tool.

We’ve all had one of our friends recommend a great restaurant or cool store. And we bet that you are more willing to try it because you trust the experience of someone you know–and hopefully respect.

Well, it’s not that different in business. In fact, research shows that more than half of possible sales generated from referrals actually do end in a sale.

Yet, while using your current customers to help you get referrals is a really great strategy, it’s not one you should consider without doing your homework. There are some key steps to consider before you get started.

Understand the Referral Concept

Getting customer referrals is not simply about others being “nice” to you. Rather, it’s more about ensuring that the referral is a benefit to the customer— and the contact they are referring to.

The favors go both ways, so make sure that you transcend their expectations by sharing their content on social media or in your own company blog posts. You’ll become an indispensable resource to them and of course, they will become the same to you.

Position Yourself For a Referral

Simply put, you usually must ask for a referral.

In some rare cases, you’ll have a customer who offers to help you bring in a new customer. And ideally, you may have a new customer contact you because one of your current customers (without being asked) suggested your business.

But in the majority of cases, you will need to ask your happy customers for a referral in whatever form that takes.

One tip: don’t put your customer in an awkward position when they are new. You will need to prove yourself with positive experiences to your customer over time before you are in a position to make the request. So, if you have just improved the bottom line for your client or gained some positive publicity for them, this may be the right time to ask for their help.

Earn the Right to ask a Referral

Yes, you read that correctly. You earn the right to ask for a referral by doing all the things you should be doing every day, such as providing amazing customer service, being proactive in knowing your customers’ needs, and really getting to know your customers. (hint: would you know what book or movie your customers really like or what their hobbies are?).

This is where you really use your CRM tool to find out what information you or your staff have gathered about your customers and how well you can use it.

By nurturing the customer relationship and really getting to know your customers, you will develop the kind of partnership that makes asking for a referral simply another natural step in the journey.

Confirm that You’ve Earned the Referral

Just because you have a great, repeat customer doesn’t mean you can assume they will make a referral for you. First, you need to ensure that your customer is comfortable with this process.

If you sense your customer may not be ready to make an actual referral, you may want to start by asking them to do a testimonial that you can share with a potential client.

Another way of gaining some help from your customers is to ask them what you could be doing better. There are many easy-to-use online survey tools that you can get out to your customers to gather some valuable feedback information.

And, don’t forget to continue to nurture your customer contacts. Stay in touch and continue to offer something of value to them. It might be discounts or useful content that will make their lives easier.

In fact, HubSpot suggests adding to your customer content the “Share with a friend” feature to allow your customers to pass along content of value to those prospective referrals.

Ask for an Action, Not a Contact!

Be very clear and specific about what you would like your customer to do to help you. Do you want to ask them to send an email or do you want them to make a call on your behalf? Ask them to let you know after they have made the contact, so you will be prepared to connect with your potential referral opportunities.

Before you ask for a contact, make sure you do your research with LinkedIn or Google so your customer doesn’t have to do the work of finding a connection for you.

Follow up, Follow up, Follow up

You can’t thank your customer enough times. Thank them when they agree to make a referral.  AN you need to thank them when they make the call or email for you. And finally, thank your client after you have contacted their referral.

You may want to consider a gift such as a gift card (local preferred), or even offer a discount for future purchases at your business.

With so many of us tapping into our friends and clients’ opinions on so many things, it just makes sense to use those connections. And the more you know about your customers, the better you will be able to transform those relationships into a win-win referral strategy.

Tomato Fish Is An Indianapolis Consulting Company Focused On Helping Small And Midsize Businesses Make Good Strategic Planning Decisions.