How to get business by referral
id you know that up
to 45 percent of the people who visit a small service business
such as yours do so based on the suggestions of others?
After watching interest rates plummet this
past summer, my wife and I decided it was time to refinance our
home, so we called Dennis Massaro, our friend and mortgage
broker. As it turned out, ours was just one of 49 closings that
Dennis did, by himself, during the month of July. Now to some,
this might seem like a banner month, however it’s pretty
much routine for
him. In fact, every month has been a
record-breaker lately. But what’s really amazing is the
fact that Dennis doesn’t have to advertise anymore.
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I’ll tell you more about Dennis in a
minute but first I have to mention Jay Abraham’s Ultimate
Live Marketing Research Laboratory.
Jay Abraham is an in-demand, high-priced,
world-renowned marketing guru who routinely charges as much as
$25,000 for a weekend seminar. That’s a lot! But in 1997
he offered to conduct a one-of-a-kind, two-year program for the
purpose of applying, measuring and critiquing various types of
advertising. Best of all, he agreed to do it for just a
fraction of his normal charge… so I signed up.
During that two-year session, the
marketing technique, which received the most attention by far,
was the referral. In fact, prior to the first session, Jay
mailed a thick packet containing 93 referral systems to each
person who planned to attend the Marketing Research Laboratory.
Each of these systems was an actual tried and tested, fully
documented and highly detailed results-producing technique for
increasing sales and profit through referral.
While it is true that referrals are a
powerful way to build a business, it’s also true that
very few businesses ever fully harness that power. And the main
reason why people fail to get referrals is the fact that they
are afraid to ask for them. They’re afraid to burden
their customer or friend with the chore of promotion. Take
yourself for example. It’s not so much a fear of talking
with Mrs. Jones but rather a reluctance to assign her the task
of endorsing your business to her friends. The truth is Mrs.
Jones would be very happy to refer you to her friends if she
truly believes you have a valuable service to offer to the
community. In short, she’d be showered with praise if she
could point her friends to you… the “best cleaner
anywhere in the area.”
Let’s clarify something. I’ve
talked with a lot of cleaners who proudly claim that their only
marketing strategy is “word of mouth.” Don’t
be confused. Casual word of mouth is not referral marketing.
Word of mouth is passive. You’re happy when someone puts
a good word in for you but you can’t count on it.
Another mistake is to assume that
excellent service will generate referrals. Sorry. It
won’t. In fact, I’ve seen some of the most
knowledgeable and technically superior drycleaners close their
doors when their flow of customers dried up. Simply being good
is not good enough.
On the other hand, if you want your
business to grow, you have to become proactive. You must be
confident enough to ask people to recommend your service. In
short, you need to develop a “system.” A referral
system is a mechanism or a process which you put into action
for the purpose of getting a particular, measurable result.
And, in this case, that result would be the acquisition of new
customers.
If you’re brand new to the referral
process, one of the easiest systems to put into place and a
good starting point is a simple letter to your customers. To
begin with, address only those customers who are on the top
rung of your customer ladder. Advocates. Customers who are so
satisfied with your quality and service that they become your
mouthpiece everywhere they go. Generally, these are folks who
have either been with you the longest or people you have
recently been able to satisfy in a radical or unique way.
In your letter, be sure to recognize their
longevity, loyalty and patronage. Let them know how much you
appreciate their business. Tell them you’d like to have
more customers like them… but that finding folks just
like them is not easy and you can’t do it alone.
Personalize the letter. Address it to
“Mrs. Jones” or “Mr. Funk.” But,
instead of asking Mrs. Jones or Mr. Funk for anybody and
everybody who can use your service… ask them to recommend
your service to just one or two people who fit their profile
and would benefit from a prompt, personalized and
fully-guaranteed cleaning service. Let’s face it, nobody
can think in terms of everyone but an advocate will quickly
identify and gladly refer one or perhaps even two key potential
prospects.
Also in your letter, emphasize that anyone
who is referred will get the same kind of treatment that your
advocate is used to getting. Remember, your advocate will be
glad to refer you if he or she believes you’ll be able to
provide a valuable service or solve someone’s problem.
If a prospect happens to be looking for a
good cleaner, the advocate will be regarded as a true hero if
they can send them to you for first class treatment. At this
point, the advocate is not burdened with the task of endorsing
your business but instead is passing along a benefit to someone
in need.
Finally, don’t forget to enclose
several special business cards in the letter. Encourage your
advocate to hand these out to their referrals. Offer a tangible
benefit on the card to get the prospect to use your service. It
could be $10 or $15 in free cleaning and a free personalized
V.I.P. bag for fast, no-hassle service. It’s up to you,
but it should be something your advocate will be proud to
offer. You should not offer to pay your advocate for referrals.
In fact, a true advocate will actually find this a bit
offensive.
At the beginning of this article, I
mentioned that Dennis, my mortgage broker, really doesn’t
advertise anymore. Instead, business comes to him through a
well-crafted referral process that he put into place when he
started in the mortgage business. In fact, he has three
distinct referral layers. Friends and relatives, influential
business associates and customers.
I happen to be on his
“friends” layer and I am both happy and confident
to refer his service. Why? Among other things, Dennis got us a
fantastic rate, gave us prompt, timely, personalized service,
paid all of our closing costs (which he does for all of his
clients) and then sent my wife and me out on the town… at
his expense. Plus, at the end of the year, Dennis holds a big
dinner for all of his new clients and those who referred them.
Hey, I’m invited! It’ll be a huge party! On top of
that, for each referral I send him, he’ll gift me with a
$50 certificate to any Lettuce Entertain You restaurant. To be
honest, I’ll recommend him regardless because I believe
he offers a service of real benefit.
So here’s the deal. If you
haven’t yet refinanced and are looking for personalized
attention from a great individual who treats you like an
important person and not just another bi-ped, call Dennis
Massaro at Aion Mortgage Corp. Phone (630) 845-9254 or fax
(630) 232-4454. Tell him he’s been recommended.
See, it’s simple. That’s the
way a referral system is supposed to work.
Bill Bishop has been a consultant with the
Golomb Group for the past 12 years, designing marketing and
promotional programs for drycleaners. He can be reached at the
Golomb Group at (800) 679-5856 or by e-mail at billbishop@golombgroup.com.
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