I met Katherine at an IT conference last spring. The conference was focused on virtualization technology and cloud solutions. I was there to learn more about remote desktop solutions and, specifically, suggested best practices for supporting the client’s hardware in a VDI environment. Katherine and I began chatting before one session and I asked about her business, and I learned that her five person organization provided virtual desktops to small businesses. Their largest client was a nine person law firm, while the average client size was five users. That seemed small to me so I asked how many total clients they had.  “About 1,000…,” was her response. I was impressed that her five person operation was supporting so many users, so I immediately inquired about their sales and marketing. Her answer was shocking:

“We don’t have sales and marketing. Our first client was a friend of mine. Every client since then has been a referral from an existing client.”

Getting referrals for your business is one of the best forms of customer acquisition. If your clients and partners are sending potential customers your way, they are doing so with an endorsement of your organization. Add in that referrals carry very little cost for you and it would be hard to find a better form of customer acquisition. Most business owners recognize this fact, yet struggle to consistently earn referrals. Here are six tips to help you earn more referrals.

  1. Don’t pay for referrals.   There are many people that think a referral program that rewards the referrer with a discount on services or outright payment are a good idea. I’m of the thinking that this is a terrible idea. Referrals are most powerful when they are genuine, and paying for them undermines their validity. Offering a gift, discount, or compensation for a referral is paid marketing. It might work, but your referral pipeline will be stronger if you focus your energy on providing the great service that leads to real referrals.
  2. Exceed expectations.  The single best way to generate referrals is to provide a service or solution that clients love. People like to talk about the products and services they love everywhere, from networking events to neighborhood barbecues. Is your company providing something people love? Why not?
  3. Lead the conversation.   From Twitter to Facebook to regular blog postings, any avenue you can find to create a conversation is worth spending time on. Why? Because it allows your listeners – clients, customers, and partners – to share your work with other people that may not be familiar with you. A client liking a Facebook post or retweeting a blog post will put your company name in front of new people. Even better, those new people will be hearing about your company through a friend or trusted colleague, giving validation to your organization.
  4. Find a networked sector.  There are many benefits to focusing on a specific vertical or market. In verticals that are heavily networked (such as legal services where attorneys interact with other attorneys on a regular basis), the volume of referrals is much greater. This isn’t to suggest that your entire business should shift focus to find a heavily networked market to enter, but if you want a pipeline full of IT referrals, you should be aware that professions that interact with each other often will allow for referrals more easily than those that do not.
  5. Give to get.  If you have clients that provide services that do not compete with your own, be eager to refer them to others. Rather than simply telling a friend in need of a bookkeeper about one of your CPA clients, post a recommendation on Yelp! or Facebook. Make your referral loud and your reach as broad as possible. The client you referred will take notice and appreciate the kind words.
  6. Ask for them.  To this point, you have not paid for referrals, provided excellent service, given existing clients a way to talk about you, referred your customers to others, and found a sector where potential clients talk to each other all the time. You’ve created an environment for your pipeline to overflow with referrals by making it easy for your clients to refer you. The last step is to nudge them to do so. Whether you are in a quarterly business review with a client or sending a short email, you should be proactive in asking for referrals. Simply saying, “You know, we build our business almost entirely by word of mouth. I think we’ve been doing a great job for you. Do you think you might introduce me to two or three colleagues that might benefit from our services?” or, “I noticed on your LinkedIn profile that you went to that sector networking event last week. Did you talk to anyone that might benefit from our services the way you have? Would you feel comfortable making an introduction?” I’m sure your first response is that asking for referrals this way might be awkward. My reply is that if you try it, you will be shocked with the positive response you get.
Happy customers equal more referrals

The math is simple: happy Customers means more referrals and more sales. 
Image source: Webindiasolutions.com

Your clients are just waiting for the opportunity to refer you to friends, colleagues, and partners that can benefit from working with you. Even though they may refer you on occasion, the best way to get them talking about your organization more often is to follow the steps above. Just as building a sales pipeline through cold calling or brand marketing may take time, this method won’t result in dozens of new clients. However, following the steps above consistently and over time will not only get other people talking about your business, but will also build your brand within the community. Even better, as your client base grows, the number of referrals you receive will grow as well, to the point that, like Katherine mentioned above, other sales and marketing efforts are entirely unnecessary. Click here to learn how Mosaic NetworX uses superior service to build a strong referral pipeline and growing customer base!