Customer referrals are an important part of any business's success.
Just because you're a small business owner doesn't mean that you love sales or comfortable having to ask a customer for anything. This is almost always particularly true when it comes to asking them to take time out of their day to do something that seems to solely benefit you, like write a review of your business.
In fact, you might feel awkward, or downright uncomfortable at the thought of it. You may even worry it could damage your customer experience or alienate them from becoming a repeat, long-term customer.
These fears are understandable, and also very common among entrepreneurs. But if you're not asking customers to write reviews and give you referrals, you might be missing out on a lot of potential. You can reach new customers and grow your revenue simply by prompting your current customer base to help you out. And yes, this means asking for client referrals.
Before you dismiss the idea, consider these stats we discovered in a recent research study of more than 3,000 qualified consumers:
Around 66% of consumers received a recommendation for a service provider from someone they knew.
89% of people who got a recommendation from someone they knew ended up hiring a service provider who came recommended.
These statistics make it clear that referrals are powerful, trusted and used often. If people already are in the habit of referring their friends and family members to businesses they believe in, why shouldn't yours be among them?
If you still need more convincing, consider that 84% of people surveyed in 58 different countries by Nielsen said they trust recommendations from people they know. All it may take is a quick referral from one of your current customers to start a domino effect of customer acquisition and business growth.
So, yes. You need client referrals to grow your business. But there are three ways to make this an easier and more rewarding process than you might think it is.
1. Make the right ask to the right people.
When you don't know how to ask for a referral from a client, you might just blurt out, "will you recommend me to your friends?" to the next client you see. There's nothing particularly wrong about that, but it leaves the whole process very open-ended. The client could respond with a well-intentioned "yes" but quickly move on with their day and never end up doing anything about it. Or the entire encounter might seem a little forced, or awkward, and the dynamic with your customer can end up shifting in a negative way.
So, what should you do instead? First, remember that the more strategic you can be about client referrals, the more you'll get out of them. Instead of haphazardly asking customers to refer you, and lacking a clear follow-up plan to help them do that, use client management software to identify the right people to ask.
The best way to do this is to set up an automated, one-question survey that will go to a customer a few days or a week after you've completed your service for them. We like the Net Promoter Score (NPS) system, which uses one very simple question: "How likely is it that you would recommend [your business name] to a friend or colleague?" All the customer has to do is select a number on a scale from 1 to 10. It takes them very little time while giving you a good deal of actionable information. If you want to make it even quicker for them, you can instead give them the choices of "likely" or "not likely" and gather data that way instead.
You'll also want to set up automated responses to go to customers once they submit their feedback. For instance, anyone who scores in the 8 to 10 range should get an email asking if they will refer you to a friend or family member, and/or leave you an online review. This ensures that the people you ask to write reviews or make referrals are those who like you and liked your services, and therefore should be happy to pay you a favor in return.
The respondents who score in the 4 to 7 range should get an email containing some more information about your company and how you can help them. These middle-of-the-road folks could end up patronizing your business again, but could just as easily forget about you. So you must stay on their radar and make sure you clearly relay your value. And lastly, the ones who score in the bottom range should be contacted directly by someone in customer service so you can find out how to improve their customer experience. This step might just prevent a customer from leaving a bad review on your website, or from giving up on ever using your company again.
2. Sweeten the deal.
Many people, especially your most satisfied customers, will be happy to refer you to their friends and family members simply because you ask. But some will need a little extra motivation to do so. After all, Software Advice found that 39% of the people they surveyed said that a financial incentive would make them "much more likely" to refer someone to a brand they love.
You can offer incentives in a variety of ways. Some companies like to send a small gift card to anyone who gives them a referral while others prefer to offer a discount for their next service. You could also enter clients who gave you referrals into a giveaway for a really valuable gift. Just make sure the terms of your incentivizing are very clear. Also, be sure to use this as a way to say "thank you" to your customers, rather than as a way to bribe them for a referral.
3. Make the referring customer look good.
Even if a customer loves your services and your company, they might be hesitant to refer a family member or friend. Sometimes people fear that their loved one may have a different customer experience than they did and sour on your brand as a result, which would reflect poorly on their recommendation. Or if your services are high quality, but also fairly expensive, customers may worry their loved one will end up spending more than they should and regretting their decision to follow their recommendation.
In order to encourage your customers to make those referrals, and quell their concerns, include some verbiage about your treatment of new clients when you ask for a referral. Maybe you throw in an extra service at no charge for every new customer who was referred by an existing customer, or perhaps they get 10% off their first appointment. Then, make sure to follow through. The new customer who was referred to you should be treated with the utmost professionalism and care, and the referring customer should be made to feel really good for connecting their loved one with your brand.