Referrals are by far one of the best ways to drive new qualified leads and turn them into sales. Your end goal should be to build a predictable referral engine that brings you qualified leads. The key word here is predictable.
The problem is that not everyone knows how to generate referrals consistently. In this episode of our podcast “Content and Coffee," Sean and I talk about where and how to master the art of driving referrals. If you’d like to take a listen you can click on the link above or find our podcast on Soundcloud.
In the last episode, we talked about how to improve your B2B marketing. We ended our conversation with focusing on the bottom of your funnel. You want to optimize the bottom of the funnel – in other words, referrals. Focusing on referrals through engagement with your product or service, for example growing by word-of-mouth, is one of the key ways to build referrals.
Why is building up your referral rate important?
When you only base your sales on cost per click advertising, there's going to be a point where it gets too expensive to allow you to sustain long-term. And focusing only on cold outreach and outbound you might burn out - which is not uncommon.
An incoming lead via referral such as word of mouth (a trusted colleague loves a product so they tell someone else to check it out) is much more efficient because:
a) you are not putting in the effort to find your leads – they are coming to you on their own accord and b) the referred person will start off with a higher level of trust, while simultaneously being less price sensitive.
These reasons make the process of turning a referral from prospect into a client much easier and more affordable than through a regular sales outbound process. The trust is built through positive testimonials and recommendations from previous clients. Generally, it is through the good work that’s already been done for an existing customer that drives more clients to you.
Where Do You Get Referrals?
Your clients or customer base
An obvious answer is your current clients. They're the best-suited people that actually understand the services you're providing. They are also likely to know other businesses in a similar niche. The bigger your pool of clients grows, the bigger your rate of referrals grow – with one caveat, that you continue to do a good job. This builds a positive feedback loop.
However, you shouldn’t just depend on your clients to naturally refer other customers to you. Ask your clients if they’d be willing to refer their colleagues, friends, and family. It's easier to ask once you've completed a project for them and they are satisfied your work. Even something as simple as saying “Hey, do you know anyone else that would benefit from what we provide?” Offering incentives along with your referral ask is also recommended to help entice your customers to refer you.
A simple way to make sure that you are not falling behind in referrals is tracking which of your customers you have already asked in a CRM or even excel. Set a reminder once a month, quarter, or year to reach out to your customer base to ask them if they think anyone in their network could use what your business provides.
Another way to get referrals is through complementary businesses. Say you have an existing strategic partnership, for example, North Digital and Ghostit, we refer each other for services that we don’t provide in-house. For North Digital, that’s content marketing, and for Ghostit, that’s website building. You can build strategic partnerships with businesses in the same industry that don’t share your services or products.
By recommending or referring another business for services that you don’t offer, you are actually building more trust with your current customer. You’re letting them know that you’re not going to try and undertake a project that you are not 100% qualified to deliver. You are showing that you would rather place their best interest above your need for more business.
Referrals can definitely go both ways.
If you’re afraid of approaching other businesses to try and establish partnerships, you can rest assure that businesses are generally pretty open to these types of opportunities. It is a win-win for both sides because, from a business point of view, that is just more opportunity for money coming in the door. Of course, for a partnership like this to work, you also have to have a fair incentive in place in order to continue the relationship. For example, I can’t bank on the fact that North Digital is going to bring me referrals just because I am doing the same thing for them. There is no immediate return. Positive reinforcements only work when it is immediate or within an appropriate time span. For example, for every client I bring to North Digital, I would get a 10-20% finders fee in return.
Another great way to get referrals is through being active on social media – specifically Instagram. If you have a strong social presence than you can engage with people over social media who have seen your personal brand and identify with it. Sean does this quite well and generates referrals through using his Instagram story to create interactive content.
You actually don’t need a huge active following in order to get a steady stream of referrals. Even having a couple thousand is enough to generate referrals. All you need is consistency, interesting content, and a way for people to interact with you.
You need to make sure that people in your network trust that you're going to do a great job, and what better way to increase this trust by being completely transparent about the work that you do. Write and publish case studies, be open about your shortcomings and mistakes because it is much more unbelievable for a company to be perfect from the start. Share your results that you’ve gained from your current clients and be as transparent as you can with what you do, how you do it, and the results that you achieve.
People are often too private about their businesses because they're afraid that their competitors are going to steal your ideas and point out your flaws, but the reality is that the negative impact is very minor compared to the positive impact of being public about your processes. People are naturally drawn to examples of growth and learning, so showing that you are continuously improving accelerates people’s trust in you.
If you are looking for a little more information on driving referrals listen to the podcast for more information. Also, if you want to follow Ghostit's behind the scenes growth, we are blogging about our road to 100 customers so sign up for our newsletter to get notified when each article goes out.