Customer Catcher™

By Martin Wales

What if you could increase your sales and profits without increasing your costs to get them? Imagine reducing, or even eliminating, the pain and frustration you've experienced when buying marketing or advertising because you were concerned about its effectiveness.

There is a way to do this with little or no cost attached. Take advantage of an under-utilized sales and marketing tactic by implementing a formalized referral process. Certainly not earth-shattering news or the latest marketing innovation, but so few companies actually do it. This is certainly common sense revisited, but ask yourself, "Am I proactively building my referral system?"

What Is A Referral?
A referral is a strong recommendation to a friend or colleague to buy from a business with which you've already done business or have a very close relationship. The most important characteristic is that your client is actually selling on your behalf. They may even be handling minor objections around pricing or certain perceptions of fear or the process involved. Using a formalized referral system, you can turn your customers into another channel for distributing marketing material or communications.

What A Referral Is Not
A referral is not the same as a testimonial. It is so much more. A testimonial is a positive comment about your product or service that you, the vendor, collect and use for your own purpose. The most common types of testimonials are quotes, in print or audio, and thank you letters. These are passive marketing communications that are very important and should be collected. They must be used in your sales process to instill confidence in your prospects. However, they only become known to prospects when you present them.

Referrals, on the other hand, are more related to an alternative sales process and cycle. I propose that it involves more of a sense of intensity -- more of a pitch than a positive commentary relayed via your customer base. It is quite a unique competitive advantage to have your clients become your sales personnel. Your faithful clients connect with their network and use their personal relationships to your benefit. If you are going all out for your existing clients, then it tends to happen anyway -- but why not "pump it up" and experience the exponential results?

Advantages Of Referrals
There really is little or no additional cost involved in building your referral business. Mainly because you're regularly dealing with your existing clients or network already. While selling, servicing or communicating with them, you merely add one more item to the agenda.

Prospects that come from referrals are shown to buy more easily and quickly with fewer objections. They have been given an introduction, presumably from a trusted source, they have already heard a testimonial and a description of the positive results, and their initial objections may have already been addressed. This means when you answer the phone they are asking you about details and are halfway to a purchase order.

A key positive consequence of a formalized referral system is that it reinforces your clients' awareness of the benefits and value of your service. A strong referral network help to builds your customers' loyalty. Each time that they refer you, they must analyze and then re-present the benefits, financial or otherwise, that they get from the relationship with your company. It actually reminds them why they picked you and dealt with you in the first place -- thereby reselling themselves.

Finally, there is a very useful reason for implementing a formalized referral system. It keeps you and your employees on your toes -- by constantly holding yourself to a higher standard. If you don't deliver the best in customer service and product quality in innovation and continually remind your clients about it, then your referral system will not work to its maximum potential.

Where To Get Referrals
The obvious and most frequently used source is your existing clients or customers. You ask and encourage those that you deal with regularly to recommend you to their associates. Sometimes you enroll your friends and family, directly or indirectly to promote your company. Generally, this is done only verbally, but other means should be used as well.

Prospects who do not purchase are useful sources for referrals but are usually not pursued aggressively enough. Ask them to refer you, especially when you know they are people who didn't buy but did recognized the value of your service -- it was just that "something" did not fit. Perhaps they just weren't in your target market and were too big or too small. This doesn't mean they would not willingly introduce you to those who are your target, as long as they are confident about the claims you've made to them.

Finally, referrals can be gathered through alliances and co-marketing with others. Work with those who complement your service or who go after the same types of customers. The most unrecognized immediate source of referrals available through these types of relationships are your suppliers. Many of your suppliers may serve hundreds or thousands of other companies that might benefit from your products or services. A smart supplier can be quite cooperative when they see the value of helping you grow: It can lead to additional orders for them if you grow, and at a minimum it helps ensure that you can continue to pay their invoices.

Hire Your Customers Today
Based on the benefits of referrals and the minimal investment required, how are you going to "hire" the best salespeople in the world to sell your products or services today? Reward your clients in some way for doing so and treat their referred colleagues like gold -- because they are. The minimal cost of customer acquisition via referrals means they are high margin clients for your bottom line.

Start right now by asking for referrals and telling your customers that you welcome new business. You'll be surprised how many of your customers would be happy to help you, if you just ask!

Martin Wales, The Customer Catcher™, "helps you get customers 'til you beg him to stop." Using your company's existing resources, he creates maximum results with minimum risk. E-mail [email protected] with "Referrals" in the subject line for info on the latest audio program, "How to Grow Your Business Profits by Increasing Client Referrals." Your questions and comments are always welcome too.