Customer Referrals: The Ultimate Lead Generation

August 3, 2011
Customer Referrals the Ultimate Lead Generation

All marketers know that a referral from a customer is the best kind of lead. Most of us will even admit it when pressed. But the strange thing is that few digital marketers talk about it very much. We'd rather talk about getting a higher search engine rank, or getting more likes on Facebook. And the traditional marketers usually aren't much better. They want to talk about billboards, press releases, and magazine ads.

When I was growing up, my dad (the best sales person I know) used to tell me:

The hardest people for you to sell to are people that you know. The easiest people for you to sell to are people who know, people [that] you know.

The customer referral is such a powerful lead because the credibility that the referrer has with the person they refer rubs off and is transferred to you. This makes your job 10 times easier! All you need to do is keep that credibility -- you do not need to build it from scratch like with a cold lead.

3 Keys to Good Referrals

My sales experience (over 1000 face to face appointments) has taught me that there are three key ingredients necessary to get good referrals.
  1. Ask - It is a rare person who will give you a referral out of the blue -- it takes someone who is selfless and is always thinking of how they can help other people. Don't get me wrong, it does happen, but you can't build a business on it. When asked to give a referral, though, nearly everyone is willing.
  2. Customer Service - Without good customer service, you can forget about getting referrals. This is obviously not in the realm of marketing, but it is a prerequisite. Your interactions with the client don't have to be perfectly smooth -- in fact some of my best referrals over the years came from clients who had some issue that we resolved.
  3. Make It Easy - The best, most willing clients will never give you a referral if you make it hard. You may even want to incentivize referrals. Money works, but isn't necessary. Recognition is often times a more powerful incentive than money. Besides, some of your industries are so heavily regulated that you can't give money to clients anyway.

When I was giving in-home presentations selling home goods I would average over 10 referrals per appointment, even from those who didn't buy. The reason was because I asked for referrals, handed them a referral form with fields for necessary information, and then suggested that they get out their address book (before the days of iPhone). It was not rare for me to leave with 20 or more referrals. In a B2B environment those are unrealistic numbers, but consistent high quality referral leads are achievable.

Challenge

Referrals are so valuable and yet most of us are not intentional about getting them. Develop a strategy that can be integrated into your digital marketing to ask for referral leads and make them easy to give. We would be happy to help if you need it. Tell us your referral stories and tips in the comment section below.

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