The Majority of Small-Business Owners Rely on Word-of-Mouth Referrals. Here Are 3 Ways to Get Them. Is it in your control as a business owner to increase the number of referrals you receive on a monthly basis or is it luck of the draw?
By Dan Slagen Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Alignable recently completed a survey of 7,500 small-business owners in North America and asked participants a single question -- what's the best way to acquire local customers?
The results?
- 85 percent said word-of-mouth referrals.
- 2 percent said radio ads.
- 1 percent said newspaper ads.
- 9 percent said Google/Facebook ads.
- 2 percent said direct mail.
Related: 25 Ways to Ask for a Referral Without Looking Desperate
A whopping 85 percent of business owners said word-of-mouth referrals! Of course everyone loves and wants referrals, but how do you get them? Is it in your control as a business owner to increase the number of referrals you receive on a monthly basis or is it luck of the draw? When business owners ask me this question, I often think about the quote: I'm a great believer in luck. The harder I work, the more luck I have. While working harder will often produce better results, working harder with the right strategy in place ensures success.
Here are three ways small-business owners get more referrals:
1. Perfect your local listing.
When someone refers your business to another person, what's the first thing that's going to happen? Since over 90 percent of consumers depend on online reviews, expect people will first search for your business by name on Google to look specifically at your five-star rating. This is a real opportunity for a number of business owners for two reasons. First, over 50 percent of businesses haven't claimed their Google local listing, so when a user searches for the brand they can't find what they need. Second, having 10 written reviews is the minimum number you should have to make sure people trust your business profile.
Keep in mind your reviews don't have to be perfect, as 94 percent of consumers would use a business with a four-star rating. The importance here is to have more than 10 written reviews. Finally, don't forget that Bing accounts for 22 percent of all search engine queries, and you can set up a local listing there too!
Related: 5 Referral Marketing Strategies for Professional Service Providers
2. Be memorable to every customer.
As a business owner, you (or your employees) interact with your customers each and every day. What memorable experience do you leave with them at the end of your interaction together? Every business owner says they prioritize treating their customers well, and you have to, but what else can you do to not only make them remember you but talk about you with others?
What if you took a picture with every satisfied customer you have and post it to your Facebook business page and tag them? That way, they would share it with their Facebook network every time. Or, what if you give each of your customers a wristband to wear that says "$0.65 vs. $0.35" to represent that $0.65 of every dollar spent on a local business stays in the local community vs. $0.35 with national businesses. Or, what if you send a handwritten card to each of your customers and offer 10 percent off their purchase if they send you a referral in the next week?
Some of these ideas will sound crazy, but the important thing is people remember you so your business is top of mind and they can associate your business with more than just "I treat my customers well."
Related: The 5 Factors That Make Customer-Referral Programs Fail
3. Consistently empower your referral network.
The stronger your referral network is, the more referrals you'll receive. This involves growing your referral network, which you can do by attending networking events, joining referral networks like BNI, or joining online communities like Alignable, LinkedIn or Nextdoor. Once you've established your referral network, think about growing it by looking for folks in your local area or that share similar customers as you.
Then, empower your referral network on a consistent basis, starting with once a month. What do you want your network to know about your business this month? What are you offering that they can help spread the word about? Have something new and special each month and continue to remind them. It's not you being annoying; it's you staying top of mind. After all, this is your referral network, it serves the purpose of helping you generate referrals!
The most important part of generating more referrals is deciding as a business owner that you're going to spend time every week just focused on it. Start with 20 minutes per week in which you shut off the outside world and focus 100 percent on doing any or all of these three things.
Related: How to Get and Use Testimonials, Referrals and Reviews
Here's a quick schedule you could follow at the start of a month:
- Week 1: Email everyone in your referral network (past customers, contacts, network connections) about what they should know about your business this month and how they can help spread the word. You can even offer a fun reward to the winning referrer each month.
- Week 2: Take time to make sure your Google listing is complete with all your info, website, hours and description. Add photos and ask five people to write a written review of your business.
- Week 3: Think about one area of your everyday operations where you're not being opportunistic to further get referrals. Go through the lifecycle of prospect to satisfied customer, and ask yourself at every step of the way when you could have been more opportunistic to generate referrals
- Week 4: Brainstorm 10 ideas how you can be more memorable to your customers. Involve people in your company in the brainstorm. You could have ways to be memorable each month, or it could be working to better perfect your existing "memorable strategy." The idea here really focuses on how you can get one person to tell others about your business, which can be done both online like on Facebook to their network, as well as offline.
Be opportunistic about getting referrals. It's not something you can turn on overnight, but rather a mindset and commitment. It's about developing a consistent behavior to take a step back and ask yourself what's happening this week or month that you can use to your advantage. What you'll notice is that your referral engine will start to spin on its own, and the more consistent you are with adding value to it, the more it will spin.
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