Karen Purves

Growing with Referrals

Posted on 10 March 2010

I asked the MD of a Building company who wants to double his turnover to £3m pa how he was going to do that. And, with confidence he replied through recommendations.

I hear this a lot when speaking to business owners, the holy grail of gaining sales with no effort. Don’t get me wrong, it is possible to have business only through referrals. But, and there is a but…

Not all referrals are equal and not all past customers refer at the same rate or with the same calibre of prospect. So, there is a requirement for a system to be in place monitoring this and rewarding those who bring you more business. After all, how much would you have a pay a salesperson to bring in the same business?

Depending upon how your enquiries arrive, the simplest way is to ask the person where they heard about you.

On the internet, the first time you may know of the referral is when they purchase, so make sure you have a field where they can add the name of the referee.

On the phone, you can have a standard form either directly into your CRM system, which could just as easily be a spreadsheet as well as an off the shelf package. Add a field to collect this information making sure you specify how to store client referrals.

The key is to collect the information so that you are able to search the database for the top referees. It is those referees who are effectively doing the job of a salesperson and you can acknowledge your appreciation.

Appreciate your Referees

Appreciation can be shown in a number of ways from simply sending a handwritten note to giving them something that demonstrates your gratitude. For this, contact colleagues, spouse or others to find out what the referring client would really appreciate. This may be a trip to the opera, weekend away or a fabulous meal in a 5 star restaurant. Rewarding your top referees in this way, shows you appreciate their thoughts and efforts. This will result in them continuing their current behaviour.

Level of Appreciation

You may be thinking “how do I decide on the level of gift?” Consider the following:

1. How much business they have brought to you
2. What impact has it had on your business? This may be additional staff, keeping current staff, updating vehicles, computer systems etc
3. How much would it have cost with a salesperson or using another marketing method?

The answers will give you the level of appreciation award.

Reactivate Past Referees

Now, if you find that most clients only refer once or twice and stop. Then this is an opportunity to review and change. First, contact a few referees, reconnect with them and ask them about any referrals they may have. This opens up the conversation to explore what is happening and whether showing appreciation would be helpful. Remember to “read between the lines” with these responses.

Referrals happening as a result of feeling good about the service and/or experience received. Reciprocity, if once there, can be reactivated and maintained.

Next Steps

Follow this guidance and you will be increasing the volume of business arriving effortlessly

Tell me what proportion of your business comes through referrals and how you track your primary referees.