Referral Marketing - What Is It And How Can It Help Your Small Business?

I know this word can strike fear into most small business owners, but I also know how incredibly effective it can be. Do you want new clients recommended to you every week without you leaving your desk? It can be done, so let's mention the R word that makes it happen, Referrals! 

How many referral strategies do you have in place? How many referrals do you receive each month from customers, other businesses, friends and family? How do you reward your referrers? First you must understand the golden rule of referrals before even thinking of trying to win them. The golden rule is WIIFT? 

WIIFT is 'What's In It For Them?' 

If you do not put anything into an equation for referrers you will never sustain the referral relationship. This is such a basic point but one so regularly missed. I have referred hundreds of leads to people I have worked with over the last 20 years. Being into sales and marketing I regularly spot opportunities, and with a strong desire to help I put people together. 

Now some of the people I refer to immediately ask how they can help me. They get it. They understand WIIFT. So many others, probably the majority sadly, take the referral, make their money on the sale or deal and never once even say thank you. Which one am I going to refer more leads to in the future? 

I call this the triangle of mutual benefit. On one corner of your trianlgle you have your clients, on another, you have the referrer, and on the final corner of your triangle you have your business. 

If you join all three points you form a triangle. You HAVE TO fill this triangle with MUTUAL BENEFIT for all three parties or it cannot support itself and will collapse! 

The end user (purchaser) receives the service; you will receive payment for your product or service, but what about the referrer? If you currently receive referrals from different sources and your referrer receives no benefit apart from "the referrer is happy that the client gets a good service" I am afraid that this will not last for much longer. You have to give something back to the referrer. 

This may be a financial payment, but the best method is always to offer reciprocal referrals. If you expect a referrer to generate leads for you, why should the referrer not expect you to do the same for them? If you take away any mutual benefit for the referrer you remove them from the equation - what are you then left with? A flat line, and flat lines in any sense are not a good thing. 

So how can you ask for referrals? Do you ask your client's for referrals? If yes, how often do you ask them? Do you ask them every day, every week, every month? You have to find the right balance, but YOU MUST ask your clients for referrals. Would you like the simple sentence to enable you to achieve this? 

"Is there anyone else you know who could benefit from my product/service?" 

The best time to ask this is just after your client has been singing your praises when you have done a wonderful job for them. Alternatively, you can also ask for referrals in your email newsletters, at the point of purchase of any products (offering discounts or additional benefits to the referrer). 

Referrals can be an excellent source of new business. If you already provide excellent products or services you will naturally receive some referrals. You can stop there if you like, but if you want to make your business more successful, profitable and your life a little bit easier, one of the best methods to achieve this is by obtaining more referrals. 

Why not set yourself a target of asking for just one referral a week to start with? (Remember there is no treasure without measure, and as Sir Alan Sugar says"You have to have a goal to score". 

 Nick Jervis