How to Get More of the Highest Converting & Cheapest Leads – Referrals
Chances Are You’re Not Taking Advantage of Referrals
HubSpot’s 107 Mind-Blowing Sales Statistics found that 91% of customers would be willing to give a referral, but only 11% of sales reps actually ask for one. Referrals in the door-to-door sales industry are extremely important, especially in certain verticals.
The solar market is notorious for being a referral driven customer base. In fact, “one of the best predictors of whether people install solar panels on their house isn’t their age, race, level of income, or their political affiliation.
It’s whether their neighbors did it first”, according to a report by CityLab.
Referrals are a great way to generate warm leads. They give sales reps a comfortable, and more natural, introduction when speaking with a new potential customer for the first time and help reduce your customer acquisition cost (CAC) and cost per lead. By lowering these two numbers, you’re increasing your profitability.
Existing customers are a powerful resource and should be used as brand advocates. Most companies don’t truly understand the reach and effect their customers can have.
Keep this in mind moving forward after each sale: “92 percent of people rely on the opinions of family and friends to make their purchasing decisions”, according to HubSpot.
Relying simply on marketing efforts to generate leads is no longer an efficient or effective strategy in today’s society, especially when you consider the influence your existing customers, who are already in love with your product or service, have. The importance of referrals can’t be overlooked.
There’s not a single, set in stone, right way for obtaining referrals and many methods are often used. While there’s not a single correct approach for getting referrals, there are wrong ways.
Top Ways to Get More Referrals
The number one thing you can do today without giving it much thought, is ask for referrals. You can smooth out the strategy and process later, but with each customer you let pass by without asking for a referral, you’re missing out on that much more revenue. Nielsen found that customers are four times more likely to buy when referred by a friend. Don’t wait, start asking.
Ask at the Right Times
As the saying goes, “timing is everything.” This is often true when asking for referrals. You wouldn’t start a job and ask your boss for a raise in the first week, would you? The same is true when asking for referrals.
Customers are less likely to provide the referral information you’re looking for before they’ve had experience with your company. The best client referrals come once they’ve had an opportunity to see your value. One of the most opportune times to seek a referral is after the customer has had a positive outcome.
Using a Lead Management Software like SPOTIO can help you keep track of the specific times you should ask for referrals. Such as when it hits a certain status you will know its time to reach out.
Incorporate Referrals into Agreements & Contracts
Contracts are an important part of closing the sale. They set the expectations for both parties moving forward and establish the initial relationship. This is a great time to outline the expectation on your end for the customer to provide references to your company. While asking for them before the customer has even really started with your company may not seem like the most appropriate timing, keep in mind these can be collected at a future date.
Allowing for referrals to be collected in the agreement or contract at some point demonstrates your desire and motivation to see the customer succeed; it displays confidence from your company. You can structure this as a deliverable. For example, if Company ABC exceeds 90% of the agreed upon goals and timelines, Client XYZ will supply three quality referrals that match our target market.
Accept Feedback & Take Action
Collecting feedback is extremely effective in determining how customers feel about your service and company. There’s a variety of methods to gathering feedback including email surveys, phone surveys, mailers, and brief in-person meetings.
Getting referrals can sometimes be difficult.
In order for customers to want to provide these quality prospects to your company, you have to establish yourself as a credible and reliable operation, as opposed to a company just trying to suck information out of clients.
When you get a good review, reach out to these individuals and further develop that relationship. This will help you to gain a more loyal advocate, position your company as one that cares about its customers, and make them want to help you as much as you help them.
Appreciate and Thank Your Referral Sources
This is one of the strongest things you can do to gain more referrals once you’ve started gaining them.
Everyone likes to feel wanted and appreciated, right? This is no different just because it’s a business. Thank your referral sources as much as possible and let them know you appreciate them sharing their contacts with you.
Don’t make the mistake of being boring when you do this. Nothing pisses me off more when I do something for a person or company than getting an automated “thank you” email.
Like, really, you appreciate me so much you sent me an automated email?? Liar. Don’t call me for anything again. (Sorry, rant over)
Make the message personal and reference the individuals they provided you to refresh their memory. If you have the ability, send a small gift; something to let them know that you appreciate how they helped you but not over the top. Keep in mind this is not a referral / loyalty program.
Buy One, Get One
Obviously you’re not going to buy a referral; that kind of defeats the purpose of them.
What I really mean is give a referral, get one in return. This concept uses one of Robert Cialdini’s 6 Principles of Persuasion, reciprocity.
This principle essentially says that people feel indebted when they’re offered something first, making them much more responsive, and likely to comply, with your subsequent requests. Giving a referral first is one of the best ways to get one in return.
Create and Provide a Form / Template
It doesn’t happen that often, but some clients will provide a referral without ever being asked to do so. They had such a great experience and like your company so much that they want to share it with other people.
Make it as easy, and as quick as possible for customers to give your company that information. Gathering this information can be done in multiple ways. The easiest places to put forms to collect referrals are on your website and in emails.
You can also put it in your email signature so that during your communication with your customer they are reminded that you work on referrals.
Create a Referral / Loyalty / Commission Program
This is typically the first idea thought of when trying to get referrals, which is why I included it last.
Reward programs have become increasingly popular in many shapes and forms. They provide incentives for customers to produce referrals for your company. Referrals are key in generating new revenue and more loyal customers.
New customers who are referred by an existing customer have a 16% higher lifetime value (LTV) than those who are not, according to Referral SaaSQuatch. Considering the considerable return they provide over the course of their lifetime with your company, sometimes you have to spend money to make money.
Go Back Through Your Customer List and Start Getting Referrals TODAY!
Knowing how valuable referrals are, companies need to make every effort to gain more of them to increase their revenue and maximize their profit by extending their customer’s LTV.
One of the best sources to gain referrals through is your marketing department as companies who all this team to manage the referral program are three times more likely to achieve revenue targets.
Customers aren’t bogged down with referral asks yet, especially since only 29% of customers are providing referrals when 92% of customers said they would. With only 10% of companies tasking their teams to acquire referrals, there’s a massive opportunity to capitalize on referred leads.
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