For many small businesses, referrals (also referred to as “word of mouth”) are the single most productive source of new business.
Being referred by a friend, a family member or a customer costs a business far less than online advertising, and research has shown that a personal recommendation is far more influential than most of the things we use to drive interest and purchase among our prospects.
But the trick to building the business you want with the help of referrals isn’t just in generating the referrals themselves — it’s also in getting the right kind of prospects referred to you.
Referrals Rely on Trust
One of the reasons that referrals are so influential is that they bear a personal “seal of approval” — the referrer must trust that you’re a good fit for the person they’re sending you, and the person being referred trusts that exploring your offerings won’t be a waste of their time.
(This is particularly important with regard to pricing. Nobody feels good if they’re referred to someone they can’t afford, and you certainly won’t appreciate being sent prospects who clearly can’t pay what you’re worth.)
But how do you referrers know whether they’re sending you the right prospects? And how do those prospects being referred know whether it’s a recommendation worth pursuing?
Equip Your Referrers with Better Information
The key to creating a robust and productive referral program is in giving referrers, and those they’re referring, the information they need to trust that the referral is likely to be a good fit.
Without this information, you’re putting referrers in the difficult position of having to figure out — without your help — who the right prospective customer might be.
Given how difficult this is to do even for those of us RUNNING our own business, imagine how it must seem to someone with only a peripheral understanding of what we do! If they guess and get it wrong, you’ll be sent prospects who aren’t a good fit. Or worse, your referrer will just share something general they DO know about you — which can be equally unhelpful.
Be Specific About What You Do…
When I started my first solo marketing practice, I just told people I was a marketing consultant. I didn’t have a lot of insight into which aspects of this very broad field I wanted to focus on, and I thought that leaving it open to interpretation would only help me spread the widest net to catch prospective clients.
As a result, I fielded a lot of calls from people sent to me because I did “some kind of marketing work, I’m not sure what.” I knew what these prospects had been told because the reason they gave for contacting me was always something along the lines of “So-and-so said you do some kind of marketing work.”
As you can imagine, a fairly high percentage of the referrals I received were prospects who needed something I either didn’t do at all or that I really didn’t want to do.
I shouldn’t have been surprised. What help was I providing to help my referrers target their efforts to help me?
A better approach is to clearly define for potential referrers the problems you solve, and how your work solves them.
Instead of just saying I offered marketing consulting, a better approach would have been to say something like:
“I help companies with a small marketing budget identify which marketing tactics make the most sense for them.”
“I help organizations which haven’t engaged in digital marketing before to build a digital program that integrates with their traditional marketing efforts.”
“I help small business owners who aren’t sure what their message should be to sort that out.”
Any of these would have done a much better job helping referrers identify contacts that might be a good fit for my business.
…and What You Don’t
At the same time, telling potential referrers what you DON’T do is also a powerful way to help them focus their efforts on your behalf.
Many of those referring you may not have a strong understanding of your industry, so may not really understand the distinctions between different products or services in that space.
For example, a referrer might not grasp that website design is different than website development. Clarifying that you offer one, but not the other, can help referrers identify the right (and wrong) prospects for you.
Imagine you develop WordPress websites, but don’t write content.
A friend of yours is chatting with someone at a coffee shop who complains about their website.
“What’s the matter with it?” asks your friend.
“Oh, the structure is okay, I just don’t write very well, so I don’t think it’s appealing to my prospects. I need help with the content.”
BAM. Your friend knows not to refer this person to you, because what this person needs (content) is not what you do (develop sites).
On the other hand, if this person had said, “I just need a new site that I can update myself and add content to without having to go through a developer for every little change,” your friend would know that you’re a great fit BECAUSE YOU TOLD THEM SO.
When I decided to be more specific about the work I do (and the work I don’t), the number of referrals I received and the number of qualified prospects I got increased dramatically.
Today, referrals continue to be a primary factor in the growth of my business.
So if you’re not getting enough quality referrals for your business, give some thought to whether you’re giving referrers the tools they need to send you the right prospects. And if you’re not, give them what they need — either on your website, in your email content asking for referrals, or in a short “cheat sheet” you can provide to those interested in referring to you.
Your friends, family, customers and community want to help. Give them the information to do it properly.