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Over the past two weeks Maxine Brand has graced our groups open houses with her wit and wisdom. Her talk discussed the benefits of building a referral-based business. But, instead of trying to relate to you all that she said, Maxine is allowing me to make her notes available to you.
I hope that you both enjoy these notes and that they will help you in building a solid referral-based business!
Benefits of a Referral-Based Business – Maxine Brand
What is a referral-based business:
It is a structured and systematic process to maximize word of mouth potential. Does this by:
- Encouraging
- Informing
- Promoting and
- Rewarding
Customers and contacts to think and talk as much as possible about their company, product and service and the value and benefit that entity brings to them and people they know.
What are the benefits of a referral-based business:
- Referral programs are an effective way to attract higher quality customers.
- Referral customers have a higher margin than other customers.
- It is much cheaper to have customers find you than for you to seek them out via traditional marketing methods like advertising. You’ll immediately become more profitable.
- Referred customers stay longer as customers than other types of customers.
- Referred customers have a higher customer lifetime value.
- Referred customers tend to cycle self-perpetuation with more satisfied customers referring others to your company.
- Referred customers come to you with a higher level of trust and will tend to have a stronger sense of loyalty right from the start.
- If the proper questions are asked to determine if this is going to be a good fit, you will find the referred customer is the kind you want and ENJOY working with.
- Your business building efforts become more targeted and you are effective in reaping greater rewards.
- You can better calculate the “bang for your buck” in terms of marketing dollars you are getting.
- Referral marketing reduces your sales cycle. With less time calling cold prospects, your business can focus on customers and their circle of influence.
- You tend not to have to defend your prices or services. They are essentially already sold on you and what you do. Quality becomes the priority consideration.
Obstacles to creating a successful referral-based business:
- Getting distracted and lose focus
- Become overwhelmed with other activities and put it on the back burner
- Don’t have time when you are meeting with clients to talk about referrals
- Uncomfortable in finding a way to bring it up
- Don’t follow up on referrals you get
- Tell yourself you are too busy for referrals and avoid having the conversation at all with prospects
Take action now to change by:
- Partnering with a colleague to focus on referrals
- Read a book about how to effectively acquire referrals
- Sign up for a class that teaches you about referrals
- Join one of Dave Wellman’s Referral Groups
Are you deserving:
- Don’t offer too many different services
- Build a reputation about being an expert on one thing
- Deliver on what you promise
- Understand the expectations of your customer
Strategy for building a referral-based business:
- Educate your audience on how to refer you
- Define your ideal client
- Define your value proposition
- Define your process
- List your potential “askees”
- Put a system in place for follow up
- Create referral agreements with key “power partners” so your they will introduce your services to their clients and you will do the same for them
- Systematize your efforts. Send out a monthly letter or email to your referral partners to let them know what is new in your business
- Keep track of your leads and check in regularly prospects
- Offer a gracious and generous thank you to those who refer you.
- Treat your referral sources with the utmost care
- Find someone who can:
- Hold you accountable
- Provide you with support when you need it
- Provide input and opinions about asking for referrals
- Help you celebrate your victories
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