We’ve been working with small business owners for years, creating effective and affordable marketing strategies to help grow their revenue. Depending on the business, our marketing tactics recommendations can vary greatly, from social media to email marketing to local search to blogging…. the list goes on and on. However, for every business, regardless of who they are, what they offer, and who their target audience is, we recommend one tactic: referrals. Of course, most of the time you can only get referrals if you ask, and many business owners are hesitant to do that. Why? If you don’t promote your small business, who will? Let’s take a closer look at this effective marketing tactic.
The power of referrals for small business owners
As a business owner, if you don’t ask for referrals, you’re missing out on a lot of potential business. Need some convincing? Here are a few reasons for referrals:
- They don’t cost anything – it doesn’t cost anything to ask for referrals.
- You’ll increase your closing ratio – “warm” leads close at a higher ratio than cold ones. A referred business will be more open to working with you than someone who found you online.
- You’ll make larger sales – there is a level of trust established when someone is referred. That can lead to a larger sale.
- Referrals bring in more referrals – if those who are referred to you do business with you and are happy, they’ll refer others.
These are just a few examples of how referrals help your business. How impactful are referrals on businesses? Eighty-four percent of people surveyed in fifty-eight different countries by Nielsen said they trust recommendations from people they know. We even trust people we don’t know, with 68 percent of respondents reporting confidence in online reviews. Gaining referrals can be one of the most effective strategies for acquiring new customers and growing your business-with one caveat. You have to ask for them.
The art of asking: how to get referrals
Forbes wrote a great article about how business owners should obtain referrals the right way. Be genuine when you ask and thank people when they give you referrals. Get over your fear of asking; you’re not being self; you’re being a good business owner by legitimately getting new prospects. Most people are happy to help other people and really, what’s the worst that can happen if you ask for a referral? They so “no” and really, how bad is that? Not very.
How can you approach someone and ask for a referral? You have a few options. Small business owners do a lot of networking to connect to their target audience. Why not take that opportunity to tell people you appreciate referrals? People are more than happy to help others out if they believe in the company they’re referring. You can also include referrals as part of wrapping up a project or perhaps after hitting, say, the 90-day mark in servicing a new client. If you’re not sure how to ask, here’s a great referral request script you can try out:
“I’m really glad that you’re pleased with my work. I’d really appreciate it if you’d pass my name along to anyone else you know who would be interested in _____________ (what you do). May I leave these extra business cards with you?”
Once you get referrals, you still have work to do
We always encourage our clients to set up a referral process for each referral they receive. That could be simply sending a thank you card, “spiffing” the referrer, and/or “spiffing” or discounting the goods or services of the customer referred. Each business will be different and keep in mind, it’s more about the gesture than anything else. People like to feel appreciated! When you reach out to the new lead that was referred to you, be sure to mention who referred them. In some cases, people may to simply pass along your business card and leave it to the one they’re referring to reach out to you if they’re interested. That’s OK! Just be diligent about tracking your lead source so you always know when a new lead came to you by a referral.
More resources to help you hone your referral asking skills
Still not sure if you’re prepared to ask for a referral? HubSpot wrote a great article about how to ask for referrals, including some free templates. The only way to start getting referrals is to start asking for them. Like we asked at the beginning of this article, if you don’t promote your small business, who will?