A few weeks ago I was speaking with my buddy KW and he said I have to see the movie The Hangover. He said it was absolutely hysterical and the funniest movie he has seen since Wedding Crashers. I must admit I had never heard of the movie but said that I was going to try and see the movie that weekend.
My sense is, what I described happens to most of us . . . in fact very often!
When was the last time a friend of yours:
- Gave you a restaurant recommendation?
- Was excited about a new car they bought?
- Talked about how much they enjoyed a conference they attended?
- Described a new TV show?
- Talked about how great their dry cleaner is?
- Told you how much their insurance broker helped them out?
All of these things have happened to me recently. In addition to that, last week we landed a large piece of new business. Yes it was exciting (very in fact) because it was a two year tracking study. Yes it was exciting because the project is over $500,000. Yes it was exciting because this is a NEW client. But more important than all of that, it was VERY exciting to me because this was a referral. The lead came from one of our current clients who passed on our name to them. To me this is the greatest form of flattery. When a client is so excited about your service sometimes they are willing to share that experience with their friends and industry contacts. It just doesn’t get any better than that!
Isn’t a company’s greatest sales tool referrals?
I believe so! So many companies (including M/A/R/C Research) don’t use this to our advantage.
- We don’t ask our core clients for referrals!
- We don’t strategize enough about this!
- We don’t have a formal program in place!
For us that needs to change. We do follow-up surveys with our clients after projects as well as with our prospects and frankly our customer satisfaction scores are amazing and off the chart.
We need to really start to change our thinking on asking for referrals.
- The real question is, "What about you?"
- Are you in the same boat as us?
- Do you have a formal program in place?
I look forward to reading your comments.
Arturo Coto says:
Merrill: I would venture to guess that most small businesses that experience sustainable growth do so because of word of mouth. They usually don’t have a marketing budget, or may not even know how to market well. However, if they have something unique (service or product) and remarkable, clients will rave about them. (“Hey Cupcakes” is a local sensation in Austin – mostly by word of mouth). This is not lost on medium to large businesses, however, at some point “shout” marketing takes over and the voice of the advocates are drowned out by all the noise marketing is making.
In B2C, referrals have been amplified by social media. Twitter, Facebook, blogs, etc. provide a rooftop where anyone with internet access can either rant or rave about companies. However, it lacks that personal touch. To me, as a consumer, it matters a lot who is providing that referral. I’ve been recommended “must see” movies, only to learn that maybe my facebook friend’s movie taste does not align with mine. (Hangover is very, very funny by the way! I do recommend it!
B2B is very high touch. I’ve tried to give and receive referrals via social networks and it is hit and miss. The best, are always during a catch-up call or a networking event when you have real conversations and see an opportunity to help or be helped.
Putting a referral program in place can be very rewarding. I’ve had one in place at every company. It can be as simple as asking account reps to ask for them at the end of engagements. Set goals – track # referrals by rep – have fun with it and make it a contest.
Don’t forge to thank the referring customer! A hand written note is all it takes to thank the referring customer. Most, at large companies, have anti-gift policies.
Great topic Merrill! Good luck launching your program! Happy to help out if I can.
Will Morris says:
I agree with you absolutely, especially the part about a referral concerning your insurance agent. We have been much more pro-active in asking for referrals, which makes sense because 99.9% of my business comes from referrals.
What I have learned is most people are not in the habit of making referrals. It’s not that they object to it, they just don’t think about it when the opportunity arises. Other people, such as Merrill, know the value of referrals and always has that on his mind. The objective is to inform and train other satisfied clients and friends to keep their eyes and ears open for referral opportunities.
I am in the process of creating a referral program.
janet says:
Coincidentally, I just won a job today that was the result of a referral. Thank you Bill Neal!!! I appreciate the confidence you have in OSS!
Jim Steber says:
Is this a referral or a favor? In 1987 while working for a large research firm, I conducted an interview with a young man fresh out of college and looking for a job. The hiring interview was to help him practice and to gain some courage, no intention of hiring him. Twelve years later, having just started my own business later I received a call from a guy who wondered what we did for a living and could we help his new company with some data collection. Eleven years later and several million dollars and we are going strong. In addition he has brought me at least three other clients.