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I would like to share a disturbing little secret with you. Almost 70% of the people you do face-to-face business with will never speak to you again.

It's not that they didn't like you or get value from your services. It's simply that they just don't care. They've got other things on their mind: the kids need new clothes, the toilet needs repairing and the car's making that strange knocking sound again. And, of course, there is that big report due tomorrow.

These are the things that take up your customer's bandwidth. They haven't thought about you since you last spoke to them weeks ago.

But why wouldn't they think about you? Didn't that last marketing campaign get great feedback?

As the available research suggests, it's not that they don't like you; rather, they have simply forgotten you. By the way, the research I read indicated that, in general, only about 8% of customers would be dissatisfied with the product or service they received.

Let me illustrate. I recently worked with a company that has served over 3,000 clients in the past three years. In that time, it has never sent out a card, email or direct mail piece communicating with past customers. Yet the company still receives a third of its new business from referrals.

So why isn't the company not reminding happy, satisfied customers that it is still around and looking to make happier, more satisfied customers?

The answer is simply that management is too busy managing the day-to-day business to have time to create new marketing pieces. Instead, the company spent hundreds of thousands of dollars on expensive, shotgun-style advertising to get the attention of potential new customers.

In other words, it's much easier in their view to call up the Yellow Pages and place a year of ads than it is to create a meaningful relationship campaign. It's true: relationship-building campaigns take time and energy—something we often don't have much of once the daily workload has been taken care of.

In this company, however, a campaign was conceived that would thank the 3,000 past customers for their business and remind them that referrals had been the key to the company's success. The campaign also provided each past customer with both offline and online tools to pass on consistent referrals. At the same time, the company reduced its print ad placements to ensure that results were not overshadowed by alternate lead generators.

The result? The company was able to triple revenues in 12 months, attributable almost entirely to referrals.

In almost every industry, there is no better way to grow your business than through referrals. Referrals are better for business for many good reasons. They are the most cost-effective way of generating business and revenues. The referrals generally make decisions more quickly and are likely to purchase more often. The best part is that less negotiation or convincing is required to enroll them.

But referrals don't always happen just by accident. They are the product of a great customer experience—a mix of sales, marketing and customer-support efforts. What we sometimes forget, though, is that we have to remind customers how great their experience was so that they will be more willing to make further referrals. Out of sight is definitely out of mind, in this case.

So how do you remind your past clients without becoming just another telemarketer? This is best done in a four-step plan:

  1. Identify the ideal referral candidates.

  2. Articulate the company USP and how it relates to their network.

  3. Create the ideal environments for referrals.

  4. Thank the referrers.

If you have a small business or practice and can afford to meet with your entire network in person, then one-on-one meetings are the best approach. By creating appointments to meet and educate others in our network, we can arrange lots of pots on the stove. Each educated referrer becomes an evangelist for our services.

It is important to realize that it is not the referrers who offer the opportunity, but their network of potential clients. We can expect to see the number of referrals increase with the number of referrers we have "activated" in our networks.

Recently, I observed how when two people sat down and systematically went through their Rolodexes they were able to generate over 50 potential referrals. Finding that they could not directly work with each other, they decided to try linking each other's networks together to create opportunities.

Another example was when a client of mine hosted a cocktail party to "enlighten" a group of carefully selected, well-connected people in its business network. The cocktail party aimed to educate these people so that they would be better informed about the company's services and therefore more likely to see potential referral opportunities.

A short presentation that clearly articulates your USP to such a gathering gives the audience improved insight into a complex service offering.

Other creative ideas for active referrals are seminars, educational workshops, letters of introduction, brain trust meetings, developing an advisory board of well-connected people, sporting events and partnerships.

In summary, referrals are the best low-cost marketing projects you can deliver. The best way to make referrals work for you is to stay in contact with your network. Here is a list of elements for a successful referral marketing campaign:

  • Referrals are not based on a transaction but on an ongoing relationship.

  • We should connect people with no thought of what we get in return.

  • Figure out how to overcome the resistance of asking for the referral.

  • Educate your network about what you do.

  • Ask for appropriate referrals.

  • Assist referrers to do their work by passing on cards and materials.

And please don't forget to thank them for their help.

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ABOUT THE AUTHOR

Richard Banfield is a business development specialist with a focus on growing profits for early- to mid-stage global technology companies. Reach him at richard@freshtilledideas.com.


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