Creating an effective referral strategy is an ongoing process, especially if you want to build a machine that delivers a constant stream of ideal target market clients.
Today I want to discuss the missing piece of your referral strategy – and why we don’t recommend offering ‘kickbacks’.
Now, if you don’t already have a referral program, why?
It sounds obvious that these programs increase the likelihood of referrals. It’s shown that companies with solid referral programs experience more revenue growth, partly because referral leads typically convert better. People are more likely to buy when referred by a friend.
You’re making life harder for yourself, so if you don’t have one already, put it on your list! And if you already have one, listen to what I’m about to say next.
Where many businesses go wrong
Many businesses I coach treat referrals as an afterthought and show gratitude for them overlooked.
While it’s in our nature as human beings to help those who genuinely ask, and we usually don’t expect to receive anything in return, it’s essential to ensure that you express sincere gratitude to those who have put in the effort to refer you to someone.
Whether you do this by email, phone or handwritten note, always thank your clients or partners immediately following a referral.
This step is critical because you want to show the person referring you that you appreciate their endorsement regardless of the outcome. It strengthens your relationships and also increases their motivation to guide you again!
Going the extra mile
If you do go on to do business with the new contact, you should also follow up with your referrer/connector with a more personalised thank you. It is often best achieved by surprising when they don’t expect to receive anything.
Some examples you might use include:
- Thank you cards – although cheap and easy, a personalised message goes a long way!
- Movie tickets and other small gifts will cost a bit more, but they are also easy to arrange and lovely tokens of appreciation.
- Raffles and competitions – people who send referrals your way can be given a chance to win larger prizes and rewards.
- A meal with a client or entertaining them at a hospitality event requires effort. However, it will leave a lasting impression and offer an excellent opportunity to strengthen relationships.
Ensure you’re generous with gratitude to those who spread the word and delivered your ideal clients. Think of what you would have to spend on advertising to get the same results.
It would help if you did your low-cost and easy ideas to show gratitude. There’s no excuse not to do them. The more expensive and difficult concepts should use only when appropriate.
What’s so bad about kickbacks?
We believe that when you’re building a community, the value generated by the quality of what you deliver will be far more critical to you and the client or connector referring your services than paying a referral fee.
If the customer had a great experience with your business, you do not need to buy their loyalty.
Additionally, if the person referred to you has received a kickback in return for the referral, they will begin to doubt how genuine the referral was.
They may question your integrity and ability to deliver high-quality products and services.
It takes an experienced business owner to comprehend that new clients can’t ever be bought, exchanged or traded – they all have minds of their own!
But prospects can become friends, repeat customers, and the best source of referrals for your business if you first focus on providing them exceptional service. Kickbacks can comprise your ability to make impartial business decisions.
The main thing to remember is that a repeat-and-referral-based business is the most influential business model you could create.
Focus on adding to your business strategy, and you’ll hustle less for new customers.
