One of the most rewarding parts about business is when all of your marketing efforts pay off and you bring on new customers. One of the most exciting steps after that is when those customers become such raving fans of your products or service that they start to refer their friends and family to you as well.
If you’re like the majority of businesses in today’s competitive market, you assume customer referrals happen automatically. So you spend all of your time and marketing efforts working on other areas of your business, and you leave this area of your business up to chance.
This is a big No-No!
We’ve all heard the adage, “It costs more to acquire a new customer than it does to retain an existing customer.” But what you may not have heard is how much easier it is to convert a referred customer to a new client than it is to acquire a new customer from advertising and marketing alone. Referral generation, however, requires time, effort, and most importantly … strategy.
One of the biggest obstacles you may have to overcome when building your strategy is training your team that asking for referrals is not begging your clients to handover contact information of their friends and family. It’s about providing an opportunity for your current clients to share the solutions they’ve found utilizing your products or services with their friends and family.
Creating a Systematic Approach to Gathering Referrals
One of the best books I’ve read on referral marketing is The Referral Engine. In the book, Jan Jantsch writes, “You know how powerful referrals can be, but you’re not doing anything worth being talked about. Or…you lack an authentic systematic approach to stimulating conversations, collecting leads, educating prospects, and converting those referrals into customers.”
Reread the last paragraph again. Referrals do not just happen.
In order to create a business where referrals are generated on a regular basis, you must build out a referral building plan that ensures everyone on your team understands your products, knows how to spot your perfect customer, is delivering the same elevator pitch, and knows how to spot when someone they are talking to uses hot button phrases that should prompt them to share more about the services you provide.
Let’s take a closer look at these four things.
- Everyone on your team understands your product(s) or service.
One of the biggest problems organizations face in their marketing efforts is ensuring everyone truly understands what you are selling and is delivering the same message around what you are selling. Below are three questions you should start asking various people throughout your company. If everyone you talk to gives the same answer, you may not have a problem in this area. But if you start to notice that each person has a different answer, you need to spend some time clearly defining the answers to these questions. Then you need to put training in place to ensure everyone is giving the same answer.—What are the top three to five problems your product or service solves for the customer?
—What are the primary features your product or service offers that differentiates you from your competitors?
—What are the best client stories your team can share around the two questions above?
- Everyone on your team knows how to spot your perfect customer.
Did you know that just because someone has money and needs products or services similar to what you are selling, they may not be the right fit for your company? Often, companies are so eager to make money (so they can make payroll or pay outstanding debt), that they take on clients who don’t truly fit the company’s culture. This often means they may drop their price to compete with another company’s pricing … despite the fact that they bring more value to the table than their competitors.The only way to solve this problem is to take the time to sit down and define who your perfect customer is — and then share a description of that person with everyone on your team.
- Everyone on your team is delivering the same elevator pitch.
Once you have gone through the first two things above, you should be well on your way to having everyone in your company delivering some semblance of the same elevator pitch. An elevator pitch is a 45 to 90 second statement about who your company is and how you solve the most common problems facing the industry you serve. It should include a statement about what differentiates you from your competitors.
- Everyone on your team knows your product’s hot buttons.
Finally, there are primary reasons people buy your product or service. Perhaps you help them make more money, you help save them time, you provide ways to improve their profitability, or you offer peace of mind. Depending on the product our service you provide, your list of hot buttons could be longer or shorter. Once you’ve developed your list of hot buttons, everyone on your team should be able to recognize them and incorporate them into their conversations.