Referral marketing and general sales referrals are quite similar, but subtle differences in approach will help business development form strong customer relationships for both the sales and marketing teams. It takes both to be successful in business, so read more to understand how you can master the referral.
Referring a friend or colleague is called referral marketing, or word-of-mouth marketing, and it’s one of the best, if not the best, marketing strategies used by many big brands including titan companies like Google, Dropbox, and even Tesla. Understanding referral marketing will bring a significant advantage to your business. Referrals don’t just happen; you need to be persistent, creative, and implement a strategy in order to generate them. Even providing exceptional customer service, going above and beyond and leaving your clients impressed, won’t work unless you’re asking them to tell their friends. People forget, or don’t think about it afterwards, so you need to be very detailed about how they can tell their friends.
I was at a restaurant a few weeks ago. The restaurant had great reviews, which surprised me when the food came. Our service was awful; he brought appetizers and main dishes at the same time and from when we got our drinks to finishing our food we only saw him once when he brought the food. The food was terrible in my opinion (well, my mother liked hers, but the rest of us weren’t impressed). While sitting and waiting for our food, we saw another server give a card to the guest to our left and ask him to kindly write a great review on Tripadvisor for them. This is why they have good reviews, even though the food is nothing special and the service average, or worse. The customers feel compelled to review the restaurant well because they are directly asked to.
In sales, ask for the referral when you are speaking directly to the customer or prospect, either on the phone or in person. It’s not recommended to ask for referrals via e-mail. You’re not just asking them to tell their friends and family, but also ask them who they know and how to contact them so that they can experience your fantastic product or service as well. Some salespeople feel shy asking for another person’s information. I’ve had trainees tell me they feel like they are invading their contact’s privacy, or that it feels uncomfortable. It does take a bit of practice to shake off that feeling when asking, but over time you will find that after helping and developing relationships with your circles of people, it becomes second nature for you. Like with everything in life, practice makes perfect.
Sales Referrals
Sales referrals are typically asked for after closing a customer. Sales representatives can ask for individual names or companies, and they often contact their customers via email or other communications mediums asking for names of others who would use their product or service.
When you close a sale, ask your customer for the name of a friend or family member who would find the product or service helpful. Ask for a name, phone number, email address and any other information for that contact that will help you qualify them. Then ask for another, but don’t ask for more than five at one time.
If the customer says “no” to buying from you, when you know for sure that they don’t need what you have or they aren’t qualified, ask them if they know anyone else who would be interested or might need what you are selling. It doesn’t take much effort to ask them the same question as you would ask them if you closed them. If you did a good job building rapport, but they still didn’t buy, don’t despair. Instead, ask for someone else in their circles who might want to buy.
Referral Marketing
Referral marketing occurs when your existing customers recommend your products and services to their friends and family. Referral marketing is also known as word-of-mouth marketing, and it happens organically. The role of a referral marketer is to intentionally influence the process so that more people can get connected to the brand. Referral marketing influential, and best of all, free!
We all have a habit of sharing experiences with our friends and closed ones. Whenever we have a good experience, we might share it with friends and family because we have loved that product and have a favorable opinion. More than 90% of customers trust recommendations from friends and family. When we have an awful experience, we are more likely to spread it to the maximum number of people to make them aware of the issue we had.
Referrals influence up to 50% of purchasing decisions. Not only that, but referrals also generate sales that are two times more than paid advertising! Get in the habit of sending a thank you email to customers who sign up and ask them in that email to refer your product or service to friends and family with a coupon code that works for a set period of time. Monitor these codes and clicks to determine who is participating and determine what’s working and what’s not. It takes time to figure this out, so keep track of all the data you can gather and tweak your approach as you go along.
A few more tips:
Be a giver in mindset and deed – when you make referrals for others, you will find more coming your way too.
Get clear about to whom you are looking to be referred. Who are they? What do they buy today? Know your target audience, so you can find the people who are the best fit for your business. The more specific you can be with yourself about the referrals you want, the more direct you can be with the people you ask for referrals.
Build your list of referral stories. It’s amazing how few of us do this consistently. Get in the habit of asking for referrals in every meaningful interaction. It is usually low stakes and an easy add-on to your conversation, and over time you will gain a lot more customers for minimal effort. After a while, it’s going to become second nature to ask for a referral.
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