Making Referrals Happen!

Victoria Downing, Remodelers Advantage Inc.

Referrals and Growth

Primary Engines of Growth

Excellent customer service and referrals

Savvy businesspeople spend 43% of their time on customer service

Same people don’t invest in developing referral leads

You Need A Structured Referral Program!

From a Survey from SunTrust Bank

51% of new business growth comes from referrals

55% view word-of-mouth as the most effective marketing investment they can make

Over 9 times more effective

Not a Regular Part of Business

Fewer than 20% have a formal referral program in place

Only 6% think asking for referrals is an important part of generating referrals

40% of businesses don’t track or measure referrals at all

Fewer than 20% are building referral networks with influencers

Why Referral Leads? High Quality Leads

Third party testimonials

More effective tactic

Lower Cost/Higher Profits

Great return on the dollar

Easier sell

Less time needed

Leverages relationships you already have

More measurable

Why Referrals Don’t Happen

Here are just some of the reasons that referrals don’t happen:

You’re not committed!

You don’t ask for them!

You’re not sure your customers will give them if you do ask!

You’re asking the wrong way!

You don’t have a clear process in place!

Six Referral Building Strategies

Create a system to ask for referrals

Measure and track your best referral sources

Create formal customer referral programs and incentives

Communicate better with customers and influencers

Develop referral networks with local partners and centers of influence

Create positive reasons to reach out to customers

Create a system to ask for referrals

Only 6% make asking for referrals a priority!

94% forget or feel uncomfortable

Get over it!

Create a system to ask for referrals

Automatic part of your client contact When? How?

Ask for their help but let them know it’s OK to choose not to

participate

Let them know you want to help their referrals

Explain the process Describe customer you want

Be specific!

Measure and Track your Best Referral Sources

Create Advocates/Net Promoters

Net Promoter:

A loyal enthusiast who keeps buying from your company and urges friends to do the same

The Ultimate Question: Author: Fred Reichheld

Would you recommend our company to a friend?

Ranked 1 low-10 high

Three kinds of clients

Promoters 9-10

Passive 7-8

Detractors 6>

80% of referrals come from promoters

Companies with more promoters grow revenues and profits faster

Create Formal Referral Programs and Incentives

Need a clear process for how referrals are handled

Offer reward to referrer, referee or both

Include promoters in referral program

Testimonials

Marketing tools

Open houses

Trade show booths

Communicate Better With Customers

Share your vision!

Business owners typically tell fewer than 10 people that they want to grow!

Tell your Circle of Influence

Tell them how they can help

How many referrals you would like?

What does the perfect customer look like?

How will their referrals be taken care of?

How will they and their friends benefit from this?

Develop Referral Networks

Reach out to local partners and centers of influence Who reaches dozens of prospective customers?

Insurance Bankers

Real Estate Agents Accountants

Hairstylists Ministers

Car Dealers Who else?

Create Positive Reasons to Reach Out to Customers

Stay Top of Mind! Reach out to them 4-12 times each year

Numerous tactics can be used Catalyst Events

High profile events that people want to go to. Don’t be cheap. Find a way to invite the influencers* and high

quality prospects.

Influencer: Someone who knows everyone, who is involved in major charities, who can spread the word about you.

Building A Stream of Referrals: Fantastic Customer Service is a Must!

Guild Quality

Independent Customer Surveys

www.GuildQuality.com

Helps business owners measure levels of customer satisfaction in a variety of areas.

Building A Stream of Referrals: Fantastic Customer Service is a Must!

“I saw them around my neighborhood doing work, and I asked the people who worked with them if they would work with them again.”

“A friend referred them.”

“I heard about their work through my customers in the mortgage business.”

The Other Side of the Coin

“The job ran a lot longer than it was supposed to. I feel like they worked on it in their spare time.”

“There was a big discrepancy between the time they said it would take to do, and the time it took.”

“We had to repeat things three or four times. They made us feel like we were bothering them by following up.”

“When we needed something we had to call them over and over and wouldn't likely get a response.”

What We All Want To Hear

“This is my third time being with them – I wrote them a letter of appreciation every time. Their workers are outstanding, the management is outstanding, the quality of work is outstanding. Everyone says "yes sir“ and "no sir."

“It is not often in this kind of business that you can get a customer who is totally satisfied. They were here when they said they would be here, they finished on time.

“They are just a great run company and the owner is going to be a rich man.”

Putting the Service-Profit Chain to Work

by James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard A. Schlesinger

Harvard Business Review Publishing

The Service-Profit Chain1. Customer loyalty drives profitability and growth.

1. A 5% increase in customer loyalty can boost profits by 25-85%. Wow!

2. Customer satisfaction drives customer loyalty.

3. Value drives customer satisfaction.

4. Employee productivity drives value.

5. Employee loyalty drives productivity.

6. Employee satisfaction drives loyalty.

7. Internal quality drives employee satisfaction.

Where do you stand now?

To find out

Start with an audit – a survey of your current customers

Pay attention to areas of deficit

Pull your staff in to help you create systems to improve

Make Referrals Happen!

Be committed to building referrals

Create a system to attract them

Measure your results

Focus on customer service to build promoters of your business

Pay attention to how the service-profit chain affects your company

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