header graphic

How to grow sales through effective referral generation...sounds simple, but do you do it well? 11/01/2016

Any business leader will tell you that referrals and word-of-mouth introductions are the most effective sources of new customers for companies in a business-to-business environment. But ask business leaders if they have a systematic process for generating and capturing referrals, and many will say “no.” Rarely does “referral process” appear explicitly as a line in the marketing plan, or drive specific, measurable activities within an organization.

Why is this the case? If referrals are so important, why don’t organizations recognize them and have a defined referral process as part of their growth strategy?

In his 2010 book, The Referral Engine: Teaching Your Business to Market Itself, author John Jantsch tackles this question. In his research, he interviewed hundreds of small and mid-sized businesses to determine not only the importance of referrals for business growth,  but how referrals actually present themselves. Here are some of the key process steps that John recommends (and by the way…that Saleswerks supports):

Step 1: Create a Superior Customer Experience

The first step in becoming “referable” is to look at your current service offering. Would existing customers refer you? Does your firm provide a superior customer experience?

For your company to become “referable,” the experience your clients have with your business must be superior to the experience they have with your competition.

Step 2: Clarify Your Market and Your Message

First, there is little point in executing any marketing activity without knowing whom you want to target. Clearly identifying your target market ensures that any activity you undertake is focused and directed to the right audience.

Second, it is critical to clarify your brand position and promise. Look for a position of leadership – are you the quality leader, the cost leader, or the best at time-to-deliver? Is your promise to drive down clients’ overall cost of ownership, or to give them a leg up in speed of bringing their product online? Does your brand promise equal your brand reality?

The answers to these questions should make up the key messaging for your firm. Sometimes called the “elevator statement” or the “unique value proposition,” this phrase or sentence should quickly and simply provide anyone with an understanding of what your company does, its position in the industry, and its brand promise to customers.

Step 3: Develop the “Referral Engine”

Once you have a “referable” product or service, and you are crystal clear about your target market and message, it is then time to build the referral engine. The old school approach to generating referrals would be to sit down with current clients, pen and note pad in hand, and say something like, “OK, Bill, can you give me the names and phone numbers of three companies you can refer me to?” In some cases this approach may still work, but generally it is intimidating and too high-pressure for today’s business environment.

Alternatively, you can use content to build your own referral engine:

Content – Business is complex. So much change happens every day; new information and techniques constantly arise in every industry. Your customers and prospects can’t keep up with it all – they are busy running their businesses.

That creates the opportunity to position your firm as a trusted knowledge source by creating relevant content. Content can take many forms, including white papers, newsletters, webinars, seminars or presentations. All these provide you the opportunity to educate, enlighten, and inform, while positioning your firm as a competent and credible source of expertise in the industry.

Step 4: Exploit Technology

Technology can play a key role in taking your referral engine to the next level. Social media tools are built on the idea of community, where like-minded individuals can meet, share ideas, and post discussion in the virtual world. This creates countless opportunities for your firm to participate in online forums and discussion boards, and to add value while demonstrating an expertise or competency. Is your firm active in online industry forums and communities? Are your customers there, too, and what are they saying about your firm.

Take LinkedIn as an example. There are literally thousands of LinkedIn groups that exist as communities around particular topic areas, geographies, or associations. These groups can provide you the opportunities to share knowledge and position your firm as a leader in your industry. Combine that with LinkedIn’s profile references, networks, and company pages, and you have a complete online referral platform.

Putting It All Together

Becoming “referable” is not a one-time project, or a goal that is going to be achieved this quarter or even this year. It touches all elements of your business, and requires discipline and commitment. But in the end it could be the best way to allocate resources and grow your firm. How “referable” is your organization?

<< back