Can You Handle the Truth About Referred Clients?

Can you handle the truth? You can throw all the money you want at your marketing campaign. You can spend tens of thousands of dollars on branding, landing pages, funnels, Facebook, sales letters, and postcards. But still, the best new customers are referred clients.

referred clients

According to a study conducted by the New York Times, 65% of companies’ new business comes from referrals. And a study done in 2011 by the American Marketing Association discovered that referred customers spend more on their first visit. They stay customers longer and have a 16% higher lifetime value than non-referred customers.

Which Referred Clients Do You Want?

referred clientsReferrals come in a few different forms. The two most popular forms of referrals are word-of-mouth referrals and partner referrals.

Word-of-mouth referrals are the most basic referrals, where one person simply tells another person about your business, product, or service. Partner referrals, on the other hand, surface when an entity with a list or audience promotes your business, product, or service.

For the purposes of this article, let’s focus on word-of-mouth referrals. Partner referrals are valuable, but that’s a topic for another day.

Get More Referred Clients

To successfully get a mass number of word-of-mouth referrals, you need to Serve, Motivate, Recognize, and Remind.

Referrals all start with how well you or your product serve the needs of your customers. This may seem obvious. However, I can’t tell you how many times I’ve received great service from the owner, only to have Battle-Ax Bertha at the front desk ruin any chance of a referral from me.

referred clientsStep two is to motivate your customer to refer. Typically this is done via a monetary reward. But it has to make an impact. Companies fail at this when they don’t provide a high-value reward for their customers. This reward needs to encourage them to sing your praises. If you want more referrals, now is not the time to be cheap. I’m often amazed that companies will pay hundreds of dollars for new leads via cold traffic. But, still, they want to offer a $25 gas gift card for a referral. That’s crazy. But, contrary to popular belief, if you want to generate more referrals, you’ll need to invest significant money.

If you really want to kick the referrals into overdrive, find ways to recognize those customers who have sent you the most referrals. For example, Facebook, the office, and your newsletter are all good places to start.

Write an article about how amazing this person is and thank them for their referrals in your newsletter. Give them an award at your next customer appreciation event. Giving your best referral sources a way to share their success with others, while promoting you, is a great way to get more referrals.

Finally, if you really want those valuable referred clients, you have to remind people who you are, all that you do, and that you’re still in business.

Help Your Customers Keep You Top Of Mind

Studies have found you have no more than 3 days of awareness after a positive interaction with a customer. It is during those 3 days that customers are most likely to refer. Using an item like a newsletter, greeting card, or individual note to create an additional positive interaction with your customers will increase referrals.

If you want to know more about growing a business with referrals, download a free chapter of my book, The No B.S. Guide to Maximum Customer Referrals and Retention, co-authored by myself and Dan Kennedy. Check it out here:

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