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How to Generate More Referral Business

Referral BusinessGetting new business is a constant struggle for many small companies. A lot of companies market aggressively and spend a lot of money to increase brand awareness and reel new customers in. Marketing is certainly important, but when you’re an entrepreneur on a tight budget, it’s also important to make sure you’re getting the best bang for your buck.

Today, I want to talk about the power of the referral. Referral business is my favorite kind of business because it shows that my customers are so happy with my services that they’ve told a friend about them. And well, the fact that it’s cheap to generate referral business is pretty nice too.

But how do you go about getting more referrals? Contrary to popular belief, they won’t always come naturally. It takes effort on your part to get customers talking about you, and I’m going to share some of my favorite tips with you for generating a steady stream of referrals.

  • Provide consistently great service-Let’s face it: No one is going to refer you if your products and services are average or vary in quality. Remember, when someone refers your business to a friend, that person is putting his name on the line too. That’s not something to be taken lightly. So, if you want to get more referrals, you need to first make sure your services are truly worth referring. Give every customer the best service you’re capable of providing.
  • Give customers incentives for referrals-Your customers have a lot going on in their lives. Hate to break it to you, but telling other people about your business is on the bottom of their to-do list, right below cleaning the mouse poop out of the attic. This means you need to motivate them into referring you, and the best way to do this is to give them something in return for doing so. You can give them a discount on future purchases for each referral they give, or you can even offer cash rewards.
  • Don’t be afraid to ask-Again, your customers have a lot going on, so they’re probably not thinking about you. The thought of referring you to a friend may not have even crossed their mind. There’s nothing wrong with asking for referrals. If you’ve provided great service and the customer is happy, ask them to please tell their friends and colleagues about your products and services. Many times, they’ll be happy to do it. One note: Don’t ask for the referral right when you send your bill. That’s a bit pushy.
  • Partner with complementary businesses-Let’s say you run a web design business, and you want to get more clients. One way you could get more referrals would be to partner with copywriters who have clients that may also be looking for design services. Look for complementary businesses that you can swap referrals with.
  • Look for networking opportunities-You don’t want to be “that guy” who is always pitching and selling, even in relaxed social situations. However, you should let people know who you are and what you do. Even if they don’t need your services, they may know someone who does. Keep your business card on you at all times!

Does your business generate a lot of referrals? What have you done to get all these referrals? Share your favorite tips by leaving a comment. You could be helping a fellow entrepreneur!

Matthew Toren
 

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs.org, BizWarriors.com and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley).

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