In 2014, the most successful marketing tool for small businesses (by far) was friend referrals (52.2 percent), according to eMarketer. This makes sense given that 85 percent of small businesses say word-of-mouth referrals are the number one way that new prospects find out about them.
Additionally, a Texas Tech study found that 83 percent of consumers are willing to refer a friend after a positive experience – yet only 29% actually do.
And as Dale Carnegie has noted, 91 percent of customers said they’d give referrals when prompted to do so, yet only 11 percent of salespeople ask for them.
Clearly, for many industries, referrals are critical to long-term success. However, most companies could do a better job of cultivating them. So why don’t satisfied clients send you referrals? Let’s explore some of the possible reasons.
1: You don’t ask for them.
You may be focused on current clients. Or maybe you’re working on other important aspects of your business. But if asking for referrals isn’t part of your strategy and regular process, you’re missing a critical component. Consider the following two stats, both from Nielsen:
- 92 percent of respondents said they trusted referrals from people they knew.
- People are four times more likely to buy when referred by a friend.
The solution for this is simple, but not necessarily easy. Make sure that asking for referrals – in a respectful, productive way – is part of your process. You may have to get out of your comfort zone to do this, but it will pay off over time.
2: They’ve had a bad experience in the past.
Your client may have had a negative experience with the referral in the past and is understandably reluctant to try it again. We’ve all had experience with the pushy pitch, the person who doesn’t hear the word “no,” and the email list that won’t let us unsubscribe.
You may be able to overcome this experience, or you may not. If your current client doesn’t want to give referrals, respectfully accept their decision and focus on earning trust instead. As Paul Ahlstrom said, “Business happens at the speed of trust.” Referrals do, too.
3: Good isn’t great.
You did a good job, but you didn’t wow them. To transform a satisfied customer into an advocate for your business, you have to do more than meet expectations. Good customer service is what your clients expect at a minimum. To motivate someone to recommend you to others, you have to go above and beyond their expectations. Even small touches can go a long way toward creating that “wow” factor. For example, a real estate agent could give their client a creative or personalized gift at closing, and follow up a year later on the anniversary with a card. The key is to create a plan that encourages word-of-mouth marketing so it’s easy for them to refer others to you.
4: They’re busy.
That top-of-mind marketing plan comes into play here. Everyone is busy these days and inundated with advertising and marketing messages. By the next time they need your services, your clients may not remember your name or your website.
An example: One of my friends moved recently. He used a moving company that impressed him so much that he told several friends, including me, about how great they were. A few months later, when it was time for me to move, I asked for the name of the moving company. Even though he was happy to give them a referral, he could not remember the name of the company or his mover. He finally remembered that he’d written a positive Yelp review for the company, and he was able to track it down eventually and share the name with me.
Make sure you’re keeping in touch with past clients so they remember who you are. Keep up a regular cadence of communication (not a sales pitch!) that is helpful without being pushy. Make it easy for them to get in touch when they need you again or when they are ready to refer you to a friend.
5: What’s in it for them?
If they’ve already done business with you, they’ve achieved their goal. For them to refer a friend or family member, there needs to be something in it for them. Perhaps they will be helpful just to be nice, but some will need an extra incentive to expend the energy for a referral.
Some companies offer discounts on future services, a prize or promotion for referrals or other referral incentives. Whatever you do, make sure you’re rewarding and thanking the people who are helping you build your business.
You can’t make someone give you a referral, but you can certainly increase your chances of getting one. Grow this segment of your business by: making sure you regularly ask for referrals, earn trust, give great customer service, stay top of mind and sweeten the deal. By asking for referrals as part of your routine, your referral numbers and bottom line will see the results over time.
While you’re adding these tips to your repertoire, make sure you’re not working against your goals. Read more about the three things that could be killing your referral business.