“Build a good referral system and keep those referrals coming in.”

Today we talk about the importance of building a good referral system.


We are all familiar with loyalty programs. Just look at people’s key chains and you can see all the loyalty cards. These work great for businesses to get customers back. What is not as familiar are referral programs. There are all kinds of referral programs out there but we just don’t notice them as much. The internet had huge referral networks and there are many organizations built around business referrals. These are all great ways to find new customers.

When we look at referral programs from a construction viewpoint there are two broad areas. There are the business to business referrals and customer to customer referrals. Today we are looking at the customer to customer side of things.

Word of mouth is by far the best source of quality leads. Having the endorsement of a customer a huge value and sets you up as the preferred choice for the project. So if these are so valuable why do we not put more effort into getting more referrals?

Let’s take a look at the human side of this first. Studies have shown that the majority of people will not automatically tell others about their experiences. While social media has made this more acceptable and easier it is still shown that about 2 out of every 10 people are natural sharers. That means that for every 10 customers only 2 of them are going to tell others about you without any prompting. We can improve that by helping others refer us. This is where a good program comes in.

[tweetthis]Build a good referral system and keep those referrals coming in[/tweetthis]

Before we dig into the idea of setting up a program I want you to look at your behavior. Do you refer businesses to your network? Do you provide feedback and reviews when you get great service or find a great product? If you do then that is great but if you don’t you need to start. How can you expect others to give you referrals and positive feedback if you are not doing the same for others. It’s just not how things work. So the first thing you need to do if you want to build referrals and feedback is to start doing it for others.

Now that you have start making efforts in improving your sharing let’s look at how we can help others share their experiences with us. We need to have a way to recognize those who share and tell others about us. This can be something informal or a formal program. You can start with something as easy as sending a Thank You card with a gift certificate to anyone who referred another customer to you. This will start to build more referrals.

If you want to really ramp up your referral system then you need to develop a more formal program. When I say formal, what I am really talking about is just something that is documented, it doesn’t need to be real sophisticated or over the top. You just need a written program that you can share with your existing and past customers.

However you decide to put your program together make sure it is easy for your customers to share their experience and offer the information to others. It helps to provide them a way to offer value to others. Maybe anyone they refer to you gets a $100 discount or something so that when they refer you to a friend they are also giving that friend some added value. Be sure to properly reward the customer that is giving the referral too. This can be cash or something like a gift certificate for dinner.

The primary thing to consider here is making sure that you ask for the referrals and give your customers a reason to give the referral.

Take-Action Item:

  1. Start building a referral system

    1. You can start small but build on it

    2. Make sure there is a reward for the referral

    3. Offer something of value to the new customer too


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