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Fire Up Referrals

By: Kim T. Gordon

    What's the quickest way to build a business? Ask most professional marketers, and they’ll tell you adopting a referral program is the preferred route to increased sales. Referrals are your hottest prospects because they come to you ready to buy. But you can't sit back hoping customers and associates will send the right referral prospects your way. To keep a steady stream of referrals coming in, you'll need a dedicated marketing program designed for that purpose.

    Start by communicating regularly with your current and past customers to stay "top of mind." Use electronic newsletters, broadcast faxes or direct mail, and telephone calls to maintain relationships and generate referrals. If you work with clients or customers on a project basis, distribute a survey or follow-up letter at the completion of every project that includes a request for referrals.

    Next, identify the types of businesses that influence your customers' or clients' buying decisions or that market complementary products or services to your target audience. For example, if you own a roofing company, insurance agents may be good referral sources for homeowners whose roofs have been damaged by fallen trees or storms. Focus on your referral prospects and build a targeted marketing program using these six tactics.

Do you have industry-specific information or expertise to lend your referral prospects? If so, create hands-on tools your prospects can use with members of your target audience. For example, a mortgage brokerage might print mortgage calculation sheets with its company name and logo and distribute them to real estate agents to use when meeting with prospective home buyers.

2. Offer referral incentives and support.

Suppose you owned an aquatic tour company in Florida. You'd supply all the local hotels and bed and breakfasts with your brochures and offer them financial incentives to refer guests. This familiar marketing tactic also works well for businesses outside the hospitality industry. The manufacturer of a unique lift belt designed for body builders, for instance, might stimulate product referrals by distributing rack brochures to gyms and supplying belts as gifts for key gym personnel.

3. Advertise to referral audiences.

Sometimes referral sources are so important to a business they warrant a dedicated advertising campaign. Be sure to focus the creative message on the benefits you'll provide the referral audience, and avoid the temptation to place the same ads you normally use to reach your end-users. A home healthcare company, for example, would run an entirely different type of campaign directed to referring healthcare practitioners than to motivate end-users -- the children of elderly patients.

Keep your referral audiences apprized of the results of your joint efforts with a newsletter (either sent electronically or by broadcast fax) filled with case histories, stories of problems solved, and thank you’s to specific businesses and individuals for sending referrals your way. When your company makes news, send clips of the articles to your referral prospect list.

If you have a Web site devoted to marketing products or services to your prospects, consider adding pages to the site that meet the needs of your referral audiences. Group the pages under a unified heading and make them accessible from your main navigation bar, so when referral prospects visit your site they can immediately find the section that’s dedicated exclusively to them. Also, set up reciprocal links to and from the sites of your principal referral businesses.

One of the cardinal rules of successful referral relationships is to always keep those who send you referrals up-to-date on the outcome. Train everyone who answers your incoming calls from prospects to ask callers where they heard about your company, and track this information in your marketing database. Create a basic thank you letter you and your staff can personalize and send as a follow-up to each referral you receive. Handle all referrals with the utmost care and you’ll build a foundation of trust that will ensure the success of your referral marketing program and keep those hot prospects coming in.

Kim T. Gordon's columns and articles are read by nearly 3 million small and home-based business owners each month.  She is the author of three books, including Big Marketing Ideas for Small Budgets: A step-by-step guide to growing your business.

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