“A recommendation from a customer is a direct result of how effective you have been at gaining their trust and delivering a product that fits their needs.” – Steve Kloyda
Any business would agree that customer referrals are the best and most powerful way to attract more business. Increasing customer referrals would in turn help to increase a company’s revenue, profits and reputation especially in a business environment that is tough and volatile. Hearing good things about a company and its products from existing users makes it easier for potential users to believe in the potency and efficacy of connecting with a company. Companies can save huge costs on marketing and promotions simply by increasing customer referrals through ensuring that their current customers remain happy and served well. The potential customers would already be partly sure of doing business with your company, as most of their apprehensions would have been laid to rest. By providing the best to current customers, companies pave the way for increasing customer referrals and gaining more customers through them.
In a bid to increasing customer referrals, many companies offer incentives and benefits to their existing customers under a customer referral program. The truth of the business world is that: “Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000 (Pete Blackshaw). However, if a company can structure the referral process, it would draw the attention of its customers toward spreading positive word of mouth, thereby reaffirming its faith in the company and letting others know that they should do business with the company. Customers are not always inclined to provide referrals / recommendations unless completely overwhelmed by great service, so all the good service opportunities go unrealized. However, by placing incentives on talking well about the company for every good experience, would increase the chances for a company to gain more customers through the recommendation of the current ones.
What does your company do toward increasing customer referrals? Probably the most obvious way is to ask the customers to provide the referrals. Customers, as mentioned, are not inclined to providing referrals possibly because they do not think that a company wants / needs it. They have their own hectic schedules to manage and do not know what a company would want from them in this regard. The top way to increasing customer referrals, would be to have a process in place to ask customers directly.
As a business, you understand that increasing customer referrals is imperative and that it is okay to ask customers. However, this asking should not happen on a random basis or when convenient for the company. A great time to ask for a customer referral is when customers are happiest with your company. This usually happens when a problem was remedied or when they received the product they were waiting for or even when your company launches a new product. These time-frames could be fairly short and the window of opportunity reduced, so having a structured process in place for such ‘windows’ would ensure that your company gains the referrals thereby maximizing the benefit to itself. Just like with every business imperative, it would be good sense to monitor the quality of referrals received during the periods mentioned and tweak the process if required.
Most companies would try to meet the customer’s expectations as often as possible. However, there would be times when companies outdo their own standards and provide exceptional service to their customers – they tell you so. This is an opportune time to ask for a referral and should made use of immediately. Request them to provide your company with contact information of people who would need and benefit from the products and services of your company. Increasing customer referrals is easy when your company is able to seize every opportunity that comes its way. Another interaction that companies can use to gain more referrals is at the time of receiving payment from customers / clients. Customers pay on time when they are happy with a company – a positive mind-frame will make them more amenable to concede to your request of providing referrals.
A structured and defined referral program is essential – this however, does not include only receiving referrals. Your company would be a customer of another – make it a point to network actively with them. You could do your part by providing a great referral for them – they would be sure to reciprocate as and when the situation came about. Increasing customer referrals is about communicating and increasing the number of direct interactions your company has with its customers. The more your company connects with customers, the better the chances that they would feel ‘warm’ and engaged with your company and would not hesitate to provide a great referral when you do ask for it.
Increasing customer referrals is not an overnight activity. Customers must want to provide them and this would happen only if your company consistently meets their expectations, needs and demands. In fact, they must be able to see value in providing the referral too – it is the onus of the company to educate their customers such that they feel connected enough to speak well of your company. Before asking customers for referrals, ensure that your company has done enough to engage with them by providing swift and effective solutions, provided them with value-added content, ensured uniform service across all touch points and other such ways to make them feel valued and important. Customers would be happy to ‘introduce’ your company to others because of the benefits they derive from it – it also gives them ‘bragging rights’ before their associates, about their value to the company.
As with any other aspect of customer service, increasing customer referrals cannot happen without the buy-in and cooperation of every member of the organization. Employees must feel energized and respected in order to pass on these feelings to the customers. When customers feel happy, they are more likely to provide referrals. In addition, happy employees are highly effective ambassadors for a company – they can encourage people to do business with the company because they are convinced that doing business with their company would be beneficial for these people. In order to build a culture of cooperation and an energized workforce, companies must hire right. The focus must remain on recruiting people that have a service bent of mind and are characteristically friendly and happy. It is simpler to disseminate knowledge and train for skills than it is for attitude and behaviour. A happy workforce will be more inclined to help the company in its efforts to providing great service and increasing customer referrals.
As mentioned, customers are unlikely to provide referrals or spread a good word even if they are satisfied with the service and products of a company. They would need to be reminded periodically about why their company’s products and customer service is the best and the edge customers can gain from being associated with it. A company could be showing these benefits in a number of ways, but it is acceptable to speak about it to draw the attention of customers, thereby ensuring that they continue doing business and also provide referrals on an on-going basis. It is important to focus on building connections with customers – a company can ask customers for referrals only when they can trust each other. The underlying message is that when a company is truly customer focused, it will show in all aspects of the business and customers will be happy to acknowledge it. There is no better way of increasing customer referrals than by giving them the best.