Join us at Entrepreneur magazine's Growth Conference, Dec. 15 in Long Beach, Calif. for a day of fresh ideas, business mentoring and networking. Register here for exclusive pricing, available only for a limited time.
Ask most professional marketers, and they'll tell you the same thing: Referrals are the quickest way to build a business. Referrals are hot prospects because they come to you ready to buy. But don't just sit back, hoping the right referral prospects come your way-design a dedicated marketing program for that purpose.
Communicate regularly with current and past customers so you can stay "top of mind." Use e-newsletters, broadcast faxes, direct mail and phone calls to maintain relationships. If you work with clients on a project-by-project basis, distribute a survey or follow-up letter at the completion of every project that includes a referal request.
Spread The Word
Identify the types of businesses that influence your customers' buying decisions or market complementary products to your target audience. For example, if you own a roofing company, insurance agents may be good referral sources for homeowners whose roofs have been damaged by fallen trees or storms. To focus on your referral prospects, use these six tactics:
1. Create specialized marketing tools. Do you have industry-specific information or expertise to lend to your referral prospects? If so, create hands-on tools your prospects can use with members of your target audience. For example, a mortgage brokerage might print mortgage-calculation sheets with its company name and logo and distribute them to real estate agents to use when meeting with prospective home buyers.
2. Offer referral incentives and support. Suppose you own an aquatic tour company. You'd want to supply local hotels and bed-and-breakfasts with your brochures and offer them incentives to refer guests. This tactic also works well for businesses in other industries. The manufacturer of a unique lift belt designed for body builders, for instance, might stimulate product referrals by distributing brochures to gyms and supplying belts as gifts for gym personnel.
3. Advertise to referral audiences. Sometimes, referral sources are so important to a business they warrant a dedicated advertising campaign. Make sure that you focus on the more creative benefits you'll provide the referral audience, and avoid the temptation to use the same ads you normally use to reach end-users. A home health-care company, for example, would run an entirely different type of campaign for referring health-care practitioners than for motivating end-users.
4. Use PR to instill confidence. Keep your referral audiences apprised of the results of your joint efforts with a newsletter (either sent electronically or via broadcast fax) filled with case histories, stories of problems solved and thank-yous to those who sent referrals your way. When your company makes the news, send clips of those articles to your referral-prospect list.
5. Market on the Web. If you have a Web site devoted to marketing products or services to your prospects, consider adding pages that meet the needs of your referral audiences. Group the pages under a unified heading and make them accessible. That way, when referral prospects visit your site, they can immediately find the section that's dedicated to them. Also, set up reciprocal links to and from the sites of your principal referral businesses.
6. Build a foundation of trust. One of the cardinal rules of successful referral relationships is to always keep those who send you referrals up-to-date on the outcome. Train everyone who answers your incoming calls from prospects to ask callers where they heard about your company, and track this information in your marketing database. Create a basic thank-you letter you and your staff can personalize and send it as a follow-up to each referral you receive. Handle all referrals with the utmost care, and you'll build a foundation of trust that will ensure the success of your referral marketing program and keep those hot prospects coming in.