One of the most common reasons for failure in a small business is the lack of an effective marketing program, according to the Small Business Administration. If you're looking for affordable ways to spread the word about your business, check out Kim Gordon's new book, Maximum Marketing, Minimum Dollars (Kaplan, 2006). In this excerpt from Gordon's book, learn 10 ways to score word-of-mouth referrals.
Ten Low-Cost Ways to Obtain Referrals
If this growth strategy is important to you, here are ten more low-cost ways you can win referrals for your business:
1. Ask the right people. Your current customers or clients can't send you referrals if they don't know you're looking for them. It may sound simplistic, but it's essential to directly communicate with your customer or client base that you are open to referrals. It's also important to let them know the kinds of referrals you're looking for. After all, some may not be fully aware of the scope of your company's abilities or services.
You can ask verbally or put your referral request in writing. Suppose you were a consultant working with a division of a major corporation. You could ask your client if there are other divisions in his company that might be able to use your services and, furthermore, to make the introductions to key executives. Your client could set up three-way phone conversations to introduce you or simply call and lay the groundwork. Or suppose you were a remodeling contractor. At the completion of each project, you might supply the homeowners with a satisfaction survey and, at the end, ask for names of other homeowners who might be interested in remodeling. You could also ask select homeowners to write testimonial letters.
2. Create interpersonal relationships. For many small-business owners, referrals hinge on creating relationships with influencers. The bottom line is people refer business to others they know and trust, and this is an instance in which it's necessary to combine sales with marketing tactics to produce the results you need. The first step is to make a list of inf luencers and contact them by phone to set up appointments to get acquainted. You can invite them to lunch or simply coffee, so long as you schedule an opportunity to sit down in a professional context and learn about each other's companies. It's important to discover under what circumstances they would be open to sharing referrals, and to determine how you can help them meet the needs of their customers or clients. Once you have initiated a relationship, keep in touch and be patient--it may take a while to instill the confidence necessary to generate business.
3. Send handwritten notes. So many entrepreneurs swear by this tactic that it's impossible to ignore. Emily Sanders, president of Sanders Financial Management, Inc., in Norcross, Ga., is a highly successful networker who says she and her colleagues often send handwritten notes to contacts and associates. Though her time for marketing is limited, Sanders has built a thriving business that grows 25 percent a year and believes this tactic is well worth the effort.
You can send notes as thank-yous, to acknowledge someone else's achievements, or to simply follow up with someone you've recently met. The key is to make the note personal and solely about the recipient. It's not an opportunity to write about your business or its services, though you should always tuck in a business card. Use attractive stationery, and be sure to hand address the envelope and apply a real stamp (instead of using a postage meter). This will be consistent with the personal tone of your note and help ensure it gets past screeners.
4. Track referral sources. It's vital to show your appreciation to referral sources, but that's impossible to do if you don't know precisely where your referrals are coming from. That's why it's essential to train everyone who answers incoming calls to ask prospects where they heard about your company. Then you can track this information in your marketing database. When you receive a referral from a known source, promptly send a thank-you letter or handwritten note to express your appreciation. Referral sources who send you significant business warrant additional attention and thanks, such as a special luncheon or gift (where appropriate).
Tracking the sources of your referrals will also give you important information concerning the types of businesses or individuals that are more likely to send work your way. You can use this information to refine your referral marketing program to target additional influencers who fit the same profile.
5. Use public relations. Referrals, like trust, are earned over time, so it's necessary to establish your company's credibility with potential referral sources. One of the best ways to accomplish this is through public relations. Place stories in key media both online and off-line that your referral prospects look to for quality industry or professional information. Once you do get PR coverage, send copies to the referral prospects in your database. If you're using postal mail, attach a brief, handwritten note. And if you're sending a copy of your coverage by e-mail, avoid a hard-sell approach by leading in with a simple note introducing the piece (pasted below and not sent as an attachment) as an item of special interest.
Another option is to create a company newsletter with case histories. This soft-sell approach should demonstrate to your targeted referral prospects that you are solving problems for your customers or clients competently and professionally.
6. Expand your Web site. Your Web site is often the first place people look when they want to learn more about your company and what it offers. That's why it's important to modify the site to meet the needs of either influentials or influencers. If you sell a product whose sales can be affected by what key influentials say, then give them lots to talk about. You can supply expert or customer-driven product reviews, or follow the example of BikeFriday.com and feature customers' stories, and add a blog or a discussion group.
To motivate influencers to send referrals your way, consider adding a separate section of your Web site just for them. They shouldn't have to wade through lots of content that's directed to the end user (customers or clients). Add a link from your main toolbar to pages that directly answer their questions, and let them know how to contact you.
7. Provide specialized tools. Do your principal influencers meet or work directly with your best prospects? If so, it's a smart idea to supply them with marketing tools they can use one-on-one with your targeted prospects. Anything from brochures, handy guides, and "tips" sheets that will be given away to your prospects should be imprinted with your company name and logo. This will position your business as a valuable resource and ensure your company name or message reaches your ideal prospects.
It's likely that these tools and materials are already being supplied by your principal competitors, so take time to evaluate how you can make yours the most effective and useful. You don't want to produce a lot of materials that will end up unused. Discuss with your influencers exactly what kinds of tools and materials they would like to receive and tailor your tools to meet their specific needs.
8. Offer incentives. I offer this tip with a major caveat attached. In some industries it may be appropriate to provide financial rewards for referrals. If this is the norm in your industry (and is legal and proper), you may wish to consider offering financial incentives. Just take care that you don't trumpet rewards for referrals in the same space in which you ask customers or clients for their business. This can actually backfire by weakening your company's credibility and the effectiveness of your marketing campaign. In short, it can just plain turn off your end users.
9. Communicate frequently. Staying top-of-mind is just as important when communicating with referral audiences as it is with your prospective customers and clients. "Touch" your referral prospects at least once every four to six weeks using a combination of sales and marketing tactics. For example, you might start by communicating with a telephone call, follow that with a meeting, a handwritten note, e-mail your company newsletter, make contact by phone, send an article or other materials by postal mail with a brief note, arrange a visit to your referral prospect's office, and so on. Get the idea? By alternating sales with marketing and by sending only materials that you know will be of special interest to your referral prospects, you'll create an effective program that builds referrals over time.
10. Instill trust. The real title for this tip should be "Don't blow it." Customers or clients who come to you by referral must be treated with the utmost care. In most instances, they're highly qualified and motivated. Chances are, they're already thinking about purchasing the types of products or services your company offers, and the only thing left to do is to convince them to buy from you. Also, every action you take from the time a referred prospect contacts your company through long after the sale is closed will be judged as "pass or fail" by the person who made the referral. After all, the way you handle the referral will reflect positively or negatively on the referrer. One of the cardinal rules of successful referral relationships is to always keep those who send you referrals up-to-date on the outcome. If you do a terrific job with the referrals you receive, you're bound to earn more.
(c) 2006 Kaplan Publishing. Quantity discounts available. For more information call (800) 621-9621 ext. 44.
Posted by Megan Goodchild on July 10, 2006 09:36 AM
