There may have been several advances in the tactics used for marketing a product or a service. But none is as effective as the most ancient one – marketing by referral, which breaks all marketing barriers even in this advanced day and age. Wondering how? Referring from one person to another, without the involvement of advertisers, outside the arena of sales people, referrals recommendations can be quite convincing to potential customers. It’s only when a product is truly good that people opt to speak and spread the word about it.

An advice from a familiar and reliable source is worth trusting and that gets the provider of the product/service a new customer. Since these recommendations are generally from a known source, and not from advertisers themselves, they carry more weight. If your product or service is good, it automatically markets itself with more referrals, this does not mean that you should not work on a plan of action to increase your referrals. I have outlined nine ways that might help you increase your referrals.

1. Offer referrals in order to frequently receive referrals – Sounds simple but it is hard to put this in practice. When appropriate, send clients to colleagues and/or trusted businesses. Make sure you contact the business before making a referral. It is also advisable to send your clients with a personal note.
2. Tell your sources how to refer – It is important to update and tell your referral sources how and how often you would like referrals. I know some businesses and professionals who would happily refer clients, but it does not happen as they don’t know when or how to go about it. You need to let others know and make sure they are clear as what products/services you have to offer which will enhance their customer experience.
3. Ask for feedback from referral sources – It is advisable to do a short survey of your referral sources to gain some feedback. This feedback is super important as you will have the ability to build on few suggestions and identify several opportunities. You could also ask them directly if you referral base is small enough. This feedback mechanism also gives people to express their concern about certain issues.
4. Collect data by asking your client as who referred them – Collecting this information can help you immensely. Every business (big or small) should send thank-you notes to people/businesses that refer. This way you will start building a database of all the different referral sources. You probably should nurture these for them to become more frequent referral sources.
5. Let people know that you want referrals – This is a common mistake business make, they assume that people know that they want referrals. I think you should be sending a personal note outlining the products and services you offer and how these might help the referrer’s clients. This should be a short and a brief note (4-5 bullet points will also work).
6. Develop trust and loyalty in referral sources – Provide justifications to referral sources for those clients who either were not satisfied by your services or you weren’t able to help at all. Negative word-of-mouth can be very harmful, but quick and straightforward handling of problems often creates the most dedicated and loyal referral sources.
7. Work at the most convenient times – Make sure that your hours are convenient for the target audience. You may need to establish evening, or weekend hours to accommodate new customers. This might not be a permanent thing, but make sure you are flexible if you are undertaking a referral marketing campaign.
8. Approach current and former customers – You should have a review of your products/services once every two years. I recommended you to ask for feedback from current and former customers about the quality and accessibility of your product/services. The market is changing rapidly and you need to adapt to these changing needs of current and new customers. If you decide to change elements of your existing services or plan to introduce new services, you should always approach your current and former customers. Ask them to try your new initiatives or ask them to refer these to someone who might actually benefit.
9. Communicate with lost customers – Assuming it is appropriate; communicate with former customers by sending articles, brochures, etc. just do it once a year. The idea is to inform them about your achievements and product enhancements. This should not be a hard sell. This should be an engagement exercise.

You are a fool of you take referrals for granted. A common misunderstanding is that if you do a good job, the referrals will come automatically. Many things can interrupt flow of new customers. Your referral base may move, retire, or seek services that you do not provide. So, act on it today!

Chintan Bharwada

Chintan is the Founder and Editor of Loyalty & Customers.

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