The document discusses the importance of referrals for business growth and provides strategies for developing an effective referral program. Some key points:
- Referrals are one of the primary engines of business growth, but many companies do not have a formal referral program in place.
- Customer satisfaction and service are critical for getting referrals, as happy customers are much more likely to recommend a business to others. The "service-profit chain" outlines how internal quality and employee satisfaction drive customer loyalty.
- The document recommends businesses create a referral asking system, measure referral sources, offer incentives, develop relationships with local influencers, and focus on excellent customer service to generate referrals.
2. 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!
3. 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
4. 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
5. 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
6. 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!
7. 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
8. Create a system to ask for referrals
Only 6% make asking for referrals a priority!
94% forget or feel uncomfortable
Get over it!
9. 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!
10. 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
11. 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
12. 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
13. 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?
14. 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?
15. 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.
16. 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.
17. 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.”
18. 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.”
19. 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.”
20. 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 Chain
1. 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.
21. 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
22. 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
23. Register for FREE today at
www.pronetwork.com
> Earn valuable rewards
points on your Simonton
Windows brand purchases!
> Get hot homeowner
leads direct from the “Where
to Buy” listing on Simonton’s
site!
> Receive exclusive
training through Simonton
University!
> Get access to expert
selling advice, Simonton
product updates and marketing
materials!