Sharon Koehler

Artistic Stone Design

It’s common knowledge that the “F” word is something we should not say out loud, certainly never in public AND not ever, ever in front of customers. If you must say it, then please do so in the privacy of your car or home. 

However, the “R” word is a different story. The “R” word should be spoken daily, to everyone you know, your friends and relatives, but most importantly your customers. What is this “R” word I am referring to?  Why “REFERRALS” of course!

Referrals are an easy, inexpensive way to grow your business. People who contact you or stop by your showroom off of referrals are almost predisposed to buy from you. A relative, friend or co-worker has already sung your praises to these people. They are ready to buy from you. They have heard all about you from a trusted verbal review and they are darkening your door more than likely to give you money. 

There are statistics to back up the idea of referral sales:

  • 92% of people trust recommendations from friends and family over all other advertising including internet advertising and social media.

  • 91% of B2B buyers are swayed by word-of-mouth advertising.

  • 74% of consumers admit that word-of-mouth is a key factor in their buying decisions.

These are powerful statistics. And yet, for some reason, a lot of companies overlook referral business. In 2015, businesses in the United States spent over $180 BILLION in advertising. That is billion with a “B”. Yet according to several current surveys, referral sales have the lowest cost to acquire, more than any other advertising or marketing strategy. 

So referrals are important to consumer and B2B purchasing. They are inexpensive, time-saving, and almost a guaranteed sale. So, why aren’t more companies getting more referrals? The simplest answer is that they don’t ask.  Surveys show that 83 percent of satisfied customers are willing to refer a business that did good work for them, but only 29 percent really do it. That is a huge discrepancy. When queried, the other 54 percent said they didn’t do it because no one asked them to.

What? That is absolutely crazy! Why would a company not ask for referral business? The recent surveys do state that there are several reasons that companies don’t ask for referrals.  The most common one is that they will be perceived either as being pushy or desperate.  

Another common reason for not asking is that, often times, businesses think that their work or their product will speak for itself. This is based on the premise that anyone who sees the work or the product will automatically fall in love with it and have to have it, hence proposing the question, “Where did you get this?” or “Who did this for you?” These questions of course lead to the referral. Unfortunately, it doesn’t always happen that way.

A third reason is fear of rejection. Now, this one does take a little common sense. Obviously we all try to do great work but occasionally, for whatever reason, there are those customers who don’t get their expectations met or exceeded. These are NOT the people you want to ask for referrals. You want to ask the customer that is gushing over what you did for them. The rejection issue is almost nonexistent with these customers.  Of course there are other reasons, but these seem to be the top three.

A couple of other stumbling blocks are when to ask for referrals and how to ask, as well.  The rule of thumb is, after the job is done and you know the customer is happy. Face-to-face is best (another good reason for a customer satisfaction follow-up visit) but you can do it over the phone, request it in your thank you notes, or add it to an online customer satisfaction survey. When you ask for the referrals, make sure the current happy customer has plenty of business cards to hand to people. That one thing makes the referral process easy for everyone. 

Also, make it clear to the referring customer that you want his/her referral to use their name as a reference. That way, the referred, potential customer should say, “Mrs. Wells on Compton street referred me.” Then you know whom to thank for the referral. 

Asking for referrals should not be a one person task. The whole team should be on-board. Any new hires that you interview should be aware that asking for referrals is part of what is expected of them. Everyone needs to be on the same page and understand why this is important to your business, and to them as well. Recognize team members who regularly receive and successfully complete jobs for referral customers.    

Track your referrals. Mrs. Smith referred Mr. Greene and that was a $5,000 project. Send Mrs. Smith a thank you note and let her know you appreciate what she did. People love to be acknowledged.

Another great way to get referrals is to give referrals. If you work with ABC company and you know they do good work, recommend them. You should get a whole network of business referrals going. They recommend you, you recommend them. It becomes a big lovefest and everybody’s businesses get busy!

So, go ahead, get out there and grow your business – one question at a time! It works.

Please send your thoughts on this article to Sharon Koehler at Sharon@asdrva.rocks.