Get The Power Of Word-of-mouth Working For You: Build A Referral Program For Long-term Sales Success

By Author: Colleen Francis, Sales Expert, is Founder and Pre
Total Articles: 53
Comment this article

Building great relationships with clients is a cornerstone of a successful career in sales. Achieving this means more than just a benefit for your customers in knowing that they can count on you for the very best in product knowledge and advice, plus after-sales support. You stand to gain as well when those satisfied customers tell their friends and colleagues about you. Referrals have a unique capability in that they have the potential to generate new clients for you without you having to seek out those clients first.

Given that kind of power, you'd think that everyone out there would be making good use of referrals, right? Surprisingly very few businesses out there capitalize on word-of-mouth from their existing customers. I've found this to be the case in my discussions with groups during Engage sales training exercises, and I'm not alone. Business guru Tom Peters recalls how he once polled executives at a workshop and asked them what percentage of their customers were giving their businesses all they could, including referrals. He was stunned by the answer: ...
... "I knew they would be quite a bit lower than 100%, but I've found that most executives estimate that only somewhere between 0 and 25% of customers are giving them all the business they could. The numbers are even lower for referral sources."

There are a few reasons for this. Among them is that classics mistakes are often committed when asking for referrals (I address that here in a follow-up article). Another is that many simply aren't persistent enough and referrals end up being more of a piecemeal exercise than something methodical and focused. This is why I recommend that sales people and business owners consider developing an in-house referral program. You have a great story to tell about your company, your products or services, as well as the way you work with customers. So you owe it to yourself to make sure everyone gets to hear that story.

Think value

Referrals often happen when you first provide something of value to your customers. I saw a great example of this recently when I did a wine tour of Ontario's Niagara region. I noticed that many winemakers there were almost as eager to tell me great things about other wines produced in the area as they were about selling the benefits of their own products. At first, I found this a bit odd. I mean why would they take time to tell me great things about their competition? Later on, after I returned home, I noticed how that helpful gesture had shaped my behaviour. Not only did I speak highly among friends about that individual winemaker, I also had great things to say about the entire winemaking region (not to mention the added fact that the region's Cabernet Franc really is a must-buy for red wine enthusiasts). Moreover, I noticed that was most eager to make a return visit to those wineries who gave me all the great tips on good wines that were also being made by their area competitors. So as you can see, there's good karma in providing solid referrals.

Think free

Free offers are timelessly powerful. I've benefitted from this first-hand, not just as a consumer but as a business owner, too. For example, I have a client who recently referred me to someone in her organization. To show my appreciation, I sent a free ticket to a much-sought after Engage event. Another great example comes from another of my clients who sends free gasoline cards (which you can well imagine was greatly appreciated when gas prices skyrocketed to $4 per gallon). Included with the card was a little note that said 'you filled up my tank, now it's my turn to fill up yours.' Little things like that—gestures that don't need to cost a fortune—can really go a long way to cementing a great business relationship.

Think creative

Consumer loyalty programs are another great way to generate repeat business. There are plenty of examples out there, from points programs to gift certificates and special discounts to returning customers. Why limit those programs just to those who already know you? Be creative. If you offer gift certificates to existing clients, include an empty spot where the recipient can choose to forward the offer to a friend or colleague who might not be familiar with your products or services. This way, everyone wins. Your client helps a friend, the friend saves some money and gains a great new business relationship by getting in contact with you, and you gain a new customer.

Here's another example. The local tennis club to which I belong began a new membership drive. They emailed existing members and included in the P.S. section the following note: be sure to refer a friend and get one month of your tennis membership free. Tennis memberships aren't cheap, so that was a great offer. So I responded to the call to action, sharing the names of all the people who I thought might be interested in joining. This program was so effective that members were jostling for pole position to be to first to share names.

Think persistent

It's important to remind customers often about who you are and what you do. After all, people get busy and are easily distracted by other things, so it's in your best interest to find ways to remain on the radar of those with who you do business. One great example of this comes courtesy of one of my clients who sell point-of-sale software to restaurants. Every month they issue a newsletter in which they showcase a success story involving one of their restaurateur clients. This gets distributed to other restaurant owners in the area. This helps build a sense of community, but it also helps to remind readers that my client's point-of-sale software would be ideal for their restaurant.