When you own a business, one of your primary goals is to build your book-of-business while still keeping your marketing budget low. A majority of small business owners must find a way to operate on a very limited budget and still generate the new business they need to cover operational expenses and earn overall revenue.
While marketing should be a primary focus for all business owners, any experienced Denver marketing specialist will tell you that referral business should also be a focus. When businesses focus on generating referral business, they can keep their advertising budgets low and attract prospects who will be loyal to the brand. If you are interesting in learning how to increase your referral business, read on and consider all of the following tips so that you can deploy a new program or modify your existing one.
Why Should You Spend Time Trying to Enter the Business of Referrals?
Before you can start to learn all of the effective tactics that will help you generate referrals, you need to know all of the benefits of focusing on referral generation. While it is an obvious benefit, growing your business is not the only factor to keep in mind. In addition to growing your business, you can reduce expenses and budgets all across the board while you are earning more revenues. Here are some of the not so obvious benefits you should keep in mind before reviewing all of the effective tactics you should try:
* There is a significantly higher closing ratio for referrals. Instead of a ratio of 10 percent, there is a conversion ratio average of 60 percent. This means that you can increase your sales revenues without dedicating a lot of time to each conversion.
* You can increase customer satisfaction when you take care of your clients’ friends and family members. With higher customer satisfaction, you will have higher retention rates.
* When you focus on targeting your customers and their circle of influence, you can reduce the amount of time you spend cold calling. By reducing the amount of time you spend telemarketing, you can spend more time effectively servicing your clients and selling to individuals who are more likely to trust your brand.
* Reduce your marketing budget and still generate quality leads.
How Can You Build Your Referral Business?
Now that you know the various benefits of focusing on referral business, it is time to get focused. Surprisingly enough, very few businesses place a strong focus on building the referral end of their business. One of the main reasons why these businesses do not put a strong emphasis on this approach of marketing is because they are not using the right tactics. Those businesses that do take time to come up with a strategy that will work can build their business simply by asking for referrals from their satisfied clientele. Here are some valuable tactics you can try so that you can change your approach and measure the results.
* Set Goals For Your Employees
One of the main problems with referral strategies is that they are not communicated to the front lines. You need to set down, come up with a practical goal, and let your employees know that this is a goal that needs to be achieved. Only after you have a goal set can you start to focus on deciding how the goal will be reached.
* Ask Customers You Have Built a Relationship With
Many sales training courses teach salespeople to ask for referrals right after they close a sale. While this can work with some customers, many customers feel like this tactic is very pushy and very aggressive. After all, you have not given the customer time to decide whether or not they are going to be loyal or do business with a competitor in the near future. Make sure the people you target for referrals have had time to experience your products or services. Build a relationship with them, keep them happy, and ask for referrals at the right opportunity.
* Go Above and Beyond for your Referral Candidates
You should be going above and beyond for all of your customers but you should make sure to go one more step for referral candidates. If your client calls to ask about their insurance premiums, you should offer the client the opportunity to review their insurance to ensure they have adequate coverage. You might want to let them know about new discounts. Just be sure to offer extra services and even follow-up support if necessary and then ask if they know anyone that might find your services valuable.
* Start a Rewards Program and Make Sure Your Customers Know About It
One of the most effective ways to build your referral business is to start an official referral program. If you are selling retail products, you can offer discounts to clients who bring in a specific number of referral customers. If you are selling a service, you might be able to offer small gift cards for gas, coffee, or grocery purchases if they refer business to you. One of the main reasons why referral programs do not work is because customers do not know about them. If you have a social media profile, make sure you promote the program. Tell customers about the program every time you have contact. Even consider sending mass mailers letting your book-of-business know the details of the program.
You might think that these tactics sound easy but many businesses fail in the referral end of their business. Make sure you identify which customers will have a network of friends that you want to market to. Once you do this, make sure to take time to build a relationship with the referral. If you do this, you can watch your referrals and your book-of-business grow proportionately.
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