A referral-based business is a business where all of the clients come in through referrals. This means that leads and clients come from others recommending the business to their family, friends, and colleagues and explaining why it is a good idea to use it for something.
But how many people actually trust recommendations from friends about using a business? The answer to this question was revealed by recent Nielsen Global Survey of Trust in Advertising. According to the report, the percentage of people trusting recommendations from friends has been increasing.
As you can see, 83 percent of respondents reported trusting recommendations from people they knew. The share decreased by only 1 percent from 2013, reflecting on the popularity of personal recommendations.
That’s good news for anyone wanting to build a referral-based business! Let’s now learn how to grow one.
Focus on Customer Service
Regardless of the area you operate in, customer service is a key element of your success that lays out the foundation for referrals and future business. By the end of the day, your customers will come to you for a service, and you better do your best to ensure they get what they want. If you don’t deliver an excellent service, they’ll look for someone else.
Some tips for you:
- Be respectful. Always remember: no matter how tough the customer is, you have to deliver because they can easily break your future referrals.
- Be responsive. Do you like to wait? Of course not. The same can be said about your customers. If they reach out to you for an inquiry or advice, your best idea is to respond as soon as you can.
- Be on-time. Being there when you said you would is paramount to building a good image and reputation.
Build a Brand Around One Thing
People want to do business with professionals who know what they’re doing, not mediocre Jacks-of-all-Trades. For example, does essay writing service also offer advertising services? Deliveries? Of course not, they focus on writing good essays.
Imagine you have to refer a service provider for someone you know. Would you recommend a company who offers a wide range of services or a company that has been doing the same thing for twenty years? Of course, the second one is your safer bet since they have probably reached a complete Rockstar level at what they do.
When a company builds a strong reputation around one thing, it becomes incredibly easy for people to refer you to others.
Let Customers Get To Know You
Another rule to remember: people don’t do business with companies, but other people. It is easier for us to connect with something we can trust. Can someone trust your mission statement and stunning website? Naturally, any business should strive to become someone the customers want to be around and trust.
To achieve that, you must:
- Let them know a little bit about you.
- Make yourself interesting! What about the time you traveled around India or helped a local animal shelter?
- Be interested in your customers as well and ask them about their experience with your product or service.
Building relationships is certainly a two-way street, so be personable and trustworthy while getting to know the people you serve.
Ask Existing Clients To Refer You
In many cases, businesses are not getting sufficient referrals because they fail to ask current clients for them. This is a simple but critical strategy that maximizes your chance to win more business. So, honestly tell your customers about your desire to grow your business and politely ask them to recommend you.
Don’t be afraid to do it! You provide excellent service, why shouldn’t more people enjoy it? Besides, your current customers are your best bet for getting more business. Most of the time, your clients are all for helping you, so all you have to do is ask.
Ask every single client for a referral. Don’t think that someone will go and tell the world about you even when you haven’t asked them to.
Close The Loop
To find out who referred your business, ask new clients about it. Were they referred by a family member, colleague, or a friend? Keep track of your referrals and feel free to talk about them to show that you appreciate them as well.
Remember how we talked about being personable and relatable above? Talking about a mutual friend is an incredible method to build a good reputation because the person who referred that new prospect is your friend as well.
Check Your Timing
If asking for referrals is an uncomfortable thing for you, don’t worry. According to experienced entrepreneurs, the best time to ask is right after a customer has complimented your work.
For example, if you’re having a conversation with a customer and they are telling about how much they enjoyed your product or service, you should thank them and casually mention that you are looking for new customers. Then, mention that it would be fantastic if they knew someone who might benefit from the same service.
Remember: knowing when to ask for referrals is a critical skill because asking at an appropriate time will not do any good for your image.
Showing appreciation is another thing that can help you stand out in the fierce competition. When you discover the person who referred you, be sure to send them a small gift or even a simple card with a thank-you note. If you’re running an online business, send them a thank-you email and include a free delivery or a discount as a way of saying thanks. Wouldn’t it be great to receive one of those?
This would help you to be connected to the target market while improving your chances of getting more customers.
Share Your Story
What better way to get new clients than to have someone recommend you over a dinner with friends, right? Such a special referral requires a special treatment and quality of service, agreed? So, do your best, because every client can get you more business.
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