The BizFilings blog covering business tips and trends.
Referrals: Business Gifts that Keep on Giving
Published on Sep 22, 2010
Read 'Referrals: Business Gifts that Keep on Giving' at 'Time to Start Up,' the small business blog by BizFilings.
Acquiring new business is something many small companies have a hard time with. Even after marketing aggressively and spending money to boost brand awareness, some struggle to attract enough new customers to comfortably build and sustain their business. Marketing is obviously vital, but as an entrepreneur on a tight budget, it's also important to make sure you're getting the most results for your efforts.
That's why it's important for any small business owner to realize the power of the referral. Referral business is my favorite kind of business because it shows that my customers are so happy with my services they've told a friend about them. And there is no better compliment - or easier sale - than that! Of course, the fact that it's inexpensive to produce referral business is pretty good too.
So how do you go about getting more referrals for your business? Contrary to popular opinion, they don't always come naturally. It actually takes effort on your part to get customers talking about your company. Following are some of my favorite tips for creating a steady stream of referral business:
Provide quality - Let's face it: No one is going to have great things to say about you and your business if your products and services are average or vary in quality. Remember, when someone refers your business to a friend or colleague, that person is putting his or her name on the line too. That's not something to be taken lightly. So, if you want to get more referrals, first be sure your services are truly worth referring. Also, deliver the best service you're capable of providing to every customer.
Provide incentives for referrals - With all your customers have going on in their lives, telling other people about your business is not at the top of their to-do lists. In fact it's likely toward the bottom - right after cleaning out the rain gutters. This means they might need motivation to refer you, and the best way to supply that motivation is to give them something in return for doing so. You can give them a discount on future purchases for each referral they give, or, depending on your business, you can even offer cash rewards or "finders fees."
Ask - Again, your customers have a lot going on, so - sorry to say - they aren't likely thinking about you. The thought of referring you to a friend might not have even crossed their mind. Although it might feel uncomfortable to some, there's absolutely nothing wrong with asking for referrals. If you've provided great service and the customer is happy, ask them to please tell their friends and colleagues about your products and services. They'll often be more than happy to do it.
Seek out networking opportunities - While at business and social events, let people know who you are and what you do. Even if they don't need your services, they might just know someone who does. Of course, you don't want to be that person who is always pitching and selling, even in relaxed social situations. However, there's nothing wrong with talking about your business in conversation, so keep your business card on you at all times!
Collaborate with complementary businesses - Let's say you run a web design business, and you want to get more clients. One way you could get more referrals would be to partner with copywriters who have clients that may also be looking for design services. Look for complementary businesses that you can swap referrals with.
What have you done in your business to generate referrals? Be sure to share your favorite tips by leaving a comment. You could be helping a fellow entrepreneur!
About the authorAdam Toren is co-founder of YoungEntrepreneur.com, one of the largest and fastest growing small business social networking forums for entrepreneurs, and a "must visit" resource for start-up CEOs, founders, aspiring entrepreneurs, mentors and investors worldwide, reaching an audience that very few can match.