Succeed at Customer Referrals

“A referral is the highest honour a business can receive from a customer.” – quotesgram

The quote above says it all – a company needs customer referrals to remain successful and sustain a good reputation. A regular flow of customer referrals works wonders for any business and while a robust and effective customer referrals program takes time and effort to put together, the positive effects are many. A study found that the likelihood of a referred customer to stay with a company is about 18% more than as compared to other customers. Given the importance and critical nature of customer referrals, it would make sense for a company to do everything possible to succeed at getting the maximum number and at making the best use of them. What steps has your company taken to succeed at customer referrals?

There are a number of factors that would make it easier for a company to gain referrals and utilize them for maximum advantage. Most importantly, the timing to ask for referral is critical. It is important to remember never to ask for referral from a customer that is too new. They would not know what to say – it would be prudent instead to wait for some time to lapse, develop some relationship with the customer, and then broach the subject of a referral. By such time, the customer would have had time to form some opinion about your company and would be more amenable to share their views. However, there could be times when the customer may not respond with a referral immediately and it would be wise to wait. It is never a good idea to pester a customer for a referral – it could irritate them and turn them away from your company.

Make customer referrals part of the business relationship, such that it helps both the company and the customer. By creating a ‘culture’ of getting the opinion and feedback of customers, a company would display its dedication and willingness to learn and improve based on what customers want. This makes customers happier to share and provide referrals, over time making them willing brand ambassadors and they would begin to share good things about your company even without being asked. The more customer referrals a company can get the more popular and visible it becomes, and would be able to attract more customers and other positive attention from the market (investors and brightest market talent).

Not all customers, but at least some would expect some sort of incentives – freebies, discounts, gift cards, preferential treatment, and other such benefits, when being asked for a referral. These incentives are essential if you are to succeed at customer referrals – gaining them and using them to advantage. Do whatever it takes to generate interest and enthusiasm for customers and you can be sure to get some glowing words of praise.

Remember to keep track of all the referral requests, customers that did provide requests, and new customers got as a result of existing customer referrals. The great news is that keeping track of this information is no longer hard or a manual process. With so many CRM systems in place, it is easy for companies to keep track of every referral and manage them to advantage. The customers that refer a new customer would expect that the company acknowledge their ‘contribution’ and hence keeping track makes a lot of sense to meet this expectation.

The best thing to do when a new customer walks in based on a reference, is to thank sincerely the referring customer. Gaining new customers, we know, is tough and costly. A referred customer, in that sense, is a free and great bonus to receive for any company and it would be prudent to nurture the relationship with both – the customer who came in through reference and definitely the customer that referred her or him.

Build on your success of gaining a referral by understanding what your company did well enough to encourage a customer to refer another. It is vital that your company knows how to get more customers to pass on the positive word of mouth and therefore gain more referrals. Building business and revenue through customer referrals is possibly the most effective and enviable characteristic of any company. It is an art and every company needs to learn how to gain and succeed at customer referrals.

Of course, irrespective of how good you think you are, and how great your offerings are, unless your company makes its customers happy consistently, there is not much use of anything. Ensure that customer service levels are always top class, and the offerings are consistently great with the most competitive pricing, in order to make and keep customers happy. It is not prudent to ask for customer referrals without first giving them what they want and doing what they would love to see.

To succeed at customer referrals, a company must remember that it is a process that begins from the first time a customer connects and continues through the entire customer journey. Customers must feel valued, know they are being heard, enjoy every interaction, and over time be able to trust the company, in order for them to ‘go out and tell’ other people to become customers. All these factors are very much in control of a company and by treating customers in the way they expect, a company would make it easier for to gain their favour and long-term business, and encourage them to provide consistently, positive word of mouth.

We have spoken about the benefits of understanding customers and one among the top reasons is to match their expectations repeatedly. This pleases customers and gives them the assurance of being valued and over time would therefore be more willing to flaunt their association with your company via referrals and testimonials. They would be happy to share their knowledge about your company and let others know of their wisdom in having a relationship with a company with top class service and products. Providing referrals for such a company, benefits customers as well and hence makes them more willing to do so continually.

It is important to remember that only when your company delivers consistent value to customers and they are able to recognize the value, should you ask for a referral. Providing a referral is usually comfortable and obvious for customers who are happy with the progression of the association. The more closely a company understands its customers, the easier it would be to come up with offerings that appear customized to the customers and hence they would see the benefits of the offerings sooner. The shorter the time period between using the products and satisfaction, the earlier would the customer be ready to provide referrals.

With the advancements in technology, companies no longer need to wait for face-to-face interactions or telephone conversations in order to gain customer referrals. In fact, digitization has made it imperative that referrals come in writing such that a company can ‘post’ it on their website, social media sites, and any other online presence they may have. Referrals can be requested via emails or any other channel that customers may find convenient to use. With so many methods at their disposal, customers are more inclined to ‘shoot out’ the referral – they can do so from anywhere and at any time.

It is acceptable to ask for customer referrals but a company must remember that given their importance, they must treat every referral with respect and show value. Forgetting to acknowledge the ‘referee’ or not contacting the customer being referred, are colossal mistakes that can cause serious problems for a company. Put together a team, dedicated to managing referrals such that nothing falls between the cracks. Stay connected with your customers at all times – you never know which one of them decides to do you a favour and pass on the information about your company to many more potential customers.

Learn about a new approach to better customer service!

Interactive Guides for Superior Customer Service

Create interactive decision trees for customer service management, cold call scripts or self-service. Improve sales performance metrics and customer delight across your call centers.

Interactive Decision Tree