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Referrals: the best new business you can get

Hands down, the best new leads come from referrals.  These prospects are likely to be highly qualified, since someone close to you thinks they might be a good fit.  Even better, the implied endorsement means the prospect is going to give you at least some serious consideration.  So close rates on referred leads tend to be high.  And since they cost you next to nothing, the ROI on referrals is stellar.  The only problem is: you can’t expect to meet your sales quota through referral alone. But what can you do to pump up your referral rate, and get more of these gems?

Plenty.  Here are four tips for generating more leads through referral.

Ask, often.  Business people have a natural tendency to be helpful to their colleagues.  It’s just the way business works.  So most of your customers and contacts are generally predisposed to give you a referral.  But you have to ask.  Review all your touchpoints, inbound and outbound, and add a referral request wherever it’s reasonable to do so.  Think about your email footers, your home page, the P.S. on your postal letters, your LinkedIn company page, your billing statements, your business cards—the options go on and on.

Handshake
Photo credit: Aidan Jones

Ask nicely.  Craft your message so that it’s clear, but not offensive.  You want to make the ask in a way that motivates a response.  One good approach to this is explaining why you are asking.  Here’s a copy sample that might fit the bill:  “Our business grows primarily through referrals from our satisfied customers.  If you are happy with our work, please tell your friends and colleagues.”

Say thank you.  If a customer does take you up on this request, respond quickly with a thank-you note.  Should you give them a thank-you gift?  This is a tough question, since many enterprises have strict controls on employee acceptance of gratuities.  Generally, I advise against a gift.  But a warmly worded personal note has enormous impact.

Follow up, and say thank you again.  Don’t go into the referral-request business if you don’t have a solid lead management system in place. There’s nothing worse than incurring a favor and then squandering it.  The prospect will need to be qualified and nurtured, as with any other lead.  Once the business closes, be sure to let the referring party know, and express your thanks again.

So get out there and get your share of referral business.  And if you have other ideas on how to get more value from referral marketing, please share!

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Ruth Stevens

Ruth Stevens

Ruth P. Stevens consults on customer acquisition and retention, for both consumer and business-to-business clients. Ruth serves on the boards of directors of the HIMMS Media Group, and the Business Information Industry Association. She is a trustee of Princeton-In-Asia, past chair of the Business-to-Business Council of the DMA, and past president of the Direct Marketing Club of New York. Ruth was named one of the 100 Most Influential People in Business Marketing by Crain’s BtoB magazine, and one of 20 Women to Watch by the Sales Lead Management Association. She serves as a mentor to fledgling companies at the ERA business accelerator in New York City. Ruth is a guest blogger at AdAge, HBR.org, and Target Marketing Magazine. Her newest book is B2B Data-Driven Marketing: Sources, Uses, Results. She is also the author of Maximizing Lead Generation: The Complete Guide for B2B Marketers, Trade Show and Event Marketing, and co-author of the white paper series “B-to-B Database Marketing.” Ruth is a sought-after speaker and trainer, and has presented to audiences and business schools in Asia, Australia, and Latin America. She has held senior marketing positions at Time Warner, Ziff-Davis, and IBM. She studied marketing management at Harvard Business School, and holds an MBA from Columbia University. Learn more at www.ruthstevens.com.

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  1. Avatar Julie Rogier

    Hi Ruth: Thanks for the great points in this post – and might I add another tip?

    It’s a team effort. Generating referrals doesn’t just belong to the sales and marketing team. Building a referral program must be owned by the entire company. Product teams, client managers, production teams are all part of the equation, if not the most important piece. As an example, let’s say a software develper is finishing up an important project with a big client. Those serving the customer should be sure to build in a “project review” to make sure the client is completely satisfied with the full implementation. Once customer satisfaction is documented, the account manager should ask the happy customer for others that could benefit from the technology provider.

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