How to Use Referrals to Market Your Business

Much has been written about all the different ways a small business can market themselves without having to spend a lot of money. The most overlooked marketing tactic is referrals. Simple to do and without costing anything, referral marketing is often left out of small business marketing strategies. Learn more about how to use referrals to market your business successfully.

What is referral marketing?

Referral marketing is spreading the word about a product or service through a business’ existing customers, rather than traditional advertising. Also known as “word of mouth” marketing, it’s literally taking advantage of your largest and most powerful sales force:  your happy customers. Happy customers are more than happy to refer business to you if they feel you provided them with a valuable product or service. The key to making this successful?  You have to ASK.

How to ask for a referral

OK, so maybe just telling someone they should just ask for a referral is a bit simplistic. There are a few things you should keep in mind when you ask for a referral. HubSpot came up with a great list of rules as a starting point:

1. Start somewhere – just start by asking one person. You won’t see results over night but over time, you WILL see results

2. Be excellent at your job – obviously, if you do subpar work, no one wants to put their good name on the line to refer you, so be VERY good at what you do so people want to refer you.

3. Get the right referrals – keep your target audience and ideal client in mind when you ask for a referral so people know who they should refer to you.

4. Inbound marketing and referrals are not mutually exclusive – getting lots of good inbound leads? Great! You STILL should ask for referrals; the two work well together!

5. Referrals aren’t cold calls – remember, you’ve been “introduced” so consider these warm leads and treat them as such.

6. Develop a referral mindset – you should give as many referrals as you get. This isn’t a one-way street! Those efforts will pay off so keep your eyes open for opportunities to refer others.

Take referrals seriously

Referrals are much stronger business leads than cold calls, so take them seriously when you get them. Create a referral generation plan and a referral follow-up plan. What does that mean?  Let’s start with the referral generation plan.  Sure, you can simply ask clients for referrals, but HOW are you asking?  Do you have a formal referral program in place?  Do you know how to ask, what to ask for, and how to keep track of referrals?  Are you sending a thank you note to anyone who refers you?  Maybe drop a small gift in the mail if that lead turns into business?  These are things you want to think about as you build your referral generation plan. Take some time to really think about what kind of referrals you want, and how you can communicate that to clients when you ask for referrals. And then keep track when you get those referrals. There are plenty of good CRMs out there that can help you track a lead source. Document who sent you that lead and thank them for the referral.

When you get the lead, follow up in a timely fashion and be sure to mention who referred you. People are busy, and may not always remember how they heard of you, so when you speak to that new lead for the first time, remind them that they were referred; it creates a connection right away and a form of trust.

Ideas for asking for the referral

If you’re ready to start a formal referral program, there are several template of how to ask for a referral by email or social media. Check out the article, “6 Ways to Ask for Referrals” to pick up a few tips and suggestions. Perhaps create a referral form email you can customize for each client. Or you can even hand out business cards that offer an incentive for referrals. There are lots of ways to getting started. The key to success is to START.

Referrals are one of the top ways to grow your business. Invest the time and energy to learn how to use referrals to market your business.