Best Practices to Get Referrals


Share on LinkedIn

Referral building depends on value and the best evidence of this is through customer service. Research illustrates that between 45 and 60 percent of every customer interaction involves customer service. The key differentiator in a competitive environment is the qualities of service customer’s receive when doing business with your organization.

It is widely known that customers are 18 percent more likely to remain with organizations that treat them well. Customer service clearly reduces expenses when current clients remain with the firm due to loyalty. Most important, customers help to acquire new clients by becoming marketing avatars. Loyalty has a lot to do with how well companies deliver on their basic promises.

When customers believe that they are treated fairly and have a marginal equity in the organization, they become loyalists. Loyalty and value are directly correlated to customer referrals. Please note that I am not merely speaking of the customary customer referral programs, but the true level of appreciation of clients that have been doing business with you. When clients believe in you they will refer the clients. For example, if your local barber or pharmacist did something for you during each visit, which saves you time and money, you might be more tempted to tell all of your friends about a fabulous experience. Or you might even bring some of your friends with you on your next visit.

This clever form of customer acquisition is known as a referral program. While many organizations use a formal referral program such as punch cards or stamps, nothing is better for increased business than a loyal customer telling others. According to a study in the Journal of Marketing, customer referral programs are indeed a financially attractive way for firms to acquire new customers. These value-based programs illustrate that good referrals from existing customers generate higher margins than any other customer program. Customer referral programs stemming from a culture of customer service have even higher gains than any other organization. Simply put, loyal customers generate more revenue at a lower cost to the firm and any traditional marketing approach. It is therefore imperative that organizations become more proficient and embed customer service in their culture; this lowers expenses and produces more profits while lowering acquisition costs.

Activities to Help Gain Additional Referrals

Several traditional and nontraditional resources for creating a referral network are available. Some traditional resources are sending gift cards or writing letters to clients. Many individuals still send handwritten notes and greeting cards to their clients. Keep track of anniversaries, birthdays, or other noteworthy announcements. Customer relationship management software facilitates this process. Electronic delivery does not require constant use of electronics.

However, if lack of time affects the ability to remain in constant contact, other resources are available. Business professionals can use a wealth of electronic sources to assist them. Some of these include e-mail marketing campaigns, electronic newsletters, electronic tip sheets, and even electronic greeting cards. “Send Out Cards” is a relatively new service. Simply upload your database into their Internet software and choose a greeting card of your choice. This service then uses your electronic signature and manually mails the card to your customer. This is a great service if you lack the time and energy to sign and mail an important announcement. No matter what you do, remain focused on your client. Most important, it is imperative that your clients appreciate your value and can articulate it to prospective clients. Remember, “Out of sight out of mind.” To build up your referral network, you must remain in harmony with customers.

Best Practices For Referrals

  • Make it Easy – Allow others to know your value. It is beneficial for you to develop a value proposition so that others can repeat your value to others within their community. For more information on creating a value proposition, see the marketing chapter in this book.
  • Remain in Contact – I mentioned earlier that in order to get referrals you must remain in constant contact with your customer base. If you do not, your competitor will.
  • Communicate Often – Ensure you’re communicating with your clients at least once per month. More is fine as long as it is not overdone.
  • Network Aggressively – It is necessary to meet others frequently. Attend regional and national events to be known within your local community.

Republished with author's permission from original post.

Drew Stevens
Drew J. Stevens Ph.D. (Dr. Drew) is the author of Split Second Selling and the soon to be released Ultimate Business Bible and six other business books on sales, customer loyalty, self mastery and business development solutions. Drew helps organizations to dramatically accelerate revenue and outstrip the competition. He conducts over 4 international keynotes, seminars and workshops per year.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here