Who doesn’t love getting referrals? Comprising 65% of all new business, (according to the NY Times), they’re also 4 times more likely to buy than other leads. However, seeking and driving referrals continues to be an underutilized strategy by many businesses.  In this three-part series, we’ll focus on refining your approach to asking for, getting and leveraging referrals to aid in your local marketing efforts.

Don’t forget to check out Part Two: 7 Ways to Boost Your Referrals, next!


referral strategyReferrals are the holy grail of customer acquisition, but many businesses are missing out on revenue potential by not taking full advantage of them. Despite 83% of customers reporting they’d refer friends and family to a business following a positive experience, only 29% actually do. Signpost’s technology is constantly working to bridge this gap by obtaining referrals from recent customers, but without it, this process can be intimidating. It might come as no surprise that the best way to drive more referrals is simply to ask, and these tips will help you effectively frame that conversation with clients.

Deliver Results: Whether it’s a game-changing product, or a delightful experience,  you need to ensure that your current customer is enthusiastic enough about the outcome to want to tell his or her friends.

Be Patient: Wait until the time is right to ask for a referral. This is usually when your customer is expressing satisfaction with your products/services.

Practice What You Preach: Refer people to your clients, or other complementary services that you think they might benefit from.

ALWAYS say “Thank You”

Why you need to ask for referrals

Many business owners avoid directly asking for referrals, assuming that clients will spread the word every time they have a great experience. Unfortunately, this is seldom the case. There could be a million reasons why, including a reluctance to impose on their contacts by making them a sales target, or it simply didn’t cross their mind. It’s a common misconception to think of referrals as a favor, but this shouldn’t be the case. You’ve worked hard to establish a successful business, and if you offer a solution that will help and thrill others, connecting you with these potential customers is mutually beneficial, and should be positioned as such.

Once you start cultivating your approach to referrals,  you’ll find it to be a great way to have a direct line to your target audience. Existing customers are more likely to know others with a similar need. They have friends, coworkers and peers with similar tastes and styles, and are attending conferences, networking, and frequently meeting new people in similar industries, any of whom will want or need your products and services. Best of all, there will be an inherent trust of your business, since a reliable source recommended it. Be respectful of this trust, and be sure to deliver on an experience that will satisfy and delight these new customers just as much.

When (and when not to) Ask

When working with a customer, there are always ample opportunities to plant the seeds for referrals. Anytime they compliment or express appreciation for your products or services, you can steer your response towards the subject. There’s no better opportunity than when they’re feeling enthusiastic about your business, and more likely want to share/brag about their results to friends and family. It’s best to tailor it to  your offering, but try something along these lines: “I’m glad to hear it! I’ve really enjoyed getting you these results; it’s why I started this business. If  you know anyone else looking for similar outcomes, I’d love to meet them and strategize about how I can help accomplish that.”

Be patient and wait until the moment feels right. Trying to pressure them into telling friends before they’re convinced can be off-putting, as is forcibly inserting the request awkwardly into the middle of your conversation. If no opportunity presents itself, naturally, wait until the end of your interaction, and if the client still doesn’t make any remarks about the quality of service/products, take it upon yourself to say you hope they had a great experience and if they know anyone looking for this solution, to keep please keep your business in mind. Many experts believe it’s best to ask in person, if possible, but it’s also acceptable to ask via email, especially if you’re in the habit of corresponding with customers there. Try to avoid asking while presenting them with a bill as this is a often a surefire way to dissolve their referral-fueling enthusiasm.

Practice what you preach: Refer others

Connect people you think might work well together and network as much as possible. People will be more likely to refer you if you’ve been referring them. It also spreads awareness to other business owners about the power of referrals, and encourages them to reciprocate. As with most business strategies, this should never be a one-way street.

Remember to say “Thank You”

Regardless of whether the referred parties follow through or make a purchase, be sure to thank your customers for taking the time to connect you with their friends and associates. In some cases they’re putting their reputation on the line to vouch for your business, so be sure to express your appreciation. Even if you’re unable to convert a referred party, you can still leverage the work your customer had to do in order to introduce you to drive future sales. We’ll be exploring that and more in Part Two, next Tuesday.


Check out Part Two: 7 Ways to Boost Your Referrals, next!