Marketing

Insider Tips From Successful Business Owners on Asking for Referrals in 2020 (Plus What NOT to Do)

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Britt Riley

3 Feb, 2020

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The importance of marketing to customers where they spend most of their time cannot be understated and few things are more powerful than personal recommendations.  Tapping into a person’s network is an easy way to put your brand front and center and getting your existing customers to help out saves both time and money. 

If you’ve got customers and haven’t yet looked into word-of-mouth marketing, you’re leaving a lot of potential revenue on the table.

In this post we’ve asked more than a dozen experts what’s working for them when it comes to referral marketing and what types of results they’re seeing – let’s get into it!

There’s value in asking for referrals

People crave connection. It’s why social media works (and why branded communities tend to flourish!) – we’re always trying to connect. And that connection that we thrive on works in every facet of life, including business.

The reason referral marketing works is because people are more comfortable with things they know (which is why branding is so important).  Getting a real person to sing your business’ praises and talk about what a great experience you provided will carry more weight than if a new prospect just randomly stumbles upon you.

Plus referral marketing is organic, free, and…it just works! There’s literally no downside to it, and as long as you’ve worked with at least one customer, you can get started right now.

However, there’s definitely a right and wrong way to ask for referrals without coming off as desperate, clingy or annoying.  The right way leaves your customers feeling motivated to help you rather than obligated, and ultimately gets you more customers (and more cash 💰).

We reached out to a few experts for tips on what’s worked for them when it comes to referrals, the results they’ve seen, and tactics that do more harm than good.

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Proven customer referral tips

Below you’ll find real tips from real business owners who’ve had success asking for referrals from current or past customers. We asked them what works, what doesn’t, and to share their results with us.

Just do it: ask for referrals

The consensus is that it’s ok to just ask for referrals. It doesn’t have to be a secret that you’re looking for new customers. You don’t need to engineer a big marketing gimmick; and it doesn’t have to be weird, awkward, or intimidating. Simply let your clients know you’re open to new customers and invite them to refer people they think would be a good fit.

My one tip would be to focus on quality rather than quantity. What this means in the world of referrals and Word-of-Mouth is to encourage your customers to refer you to one or two people who they know very well and who are likely to be in need of your product or services.

Research evidence has shown that the effect of marketing referrals on potential customers’ attitude and purchase intention is positively moderated by tie strength. In other words, we tend to trust people who we know well and act on their suggestions. Even though this does not sound like a ground-breaking insight, most companies are still primarily oriented on increasing their reach, prompting their customers to spread the word among as many people as they can via social media. However, this often leads to very little conversion.

Tell your satisfied customers to hand-pick one person who is close to them and who could really benefit a lot from purchasing your product or service instead of asking them to share a pre-made WoM post on Facebook or Twitter – you won’t regret it!”

– Marek Hasa, Pixelfield

The best way we have found to increase the number of referrals to our business is by simply asking. Ask your existing customers if they know of anyone else that could use your products or services. Even if you are cold calling, always end the call with do you know of anyone else that may have a need for our services? It actually works, the majority of the time. Give it a try!”

– Kacy Carlson, Updog

Ask for ratings: Not every one of your customers will give you a referral. If they are unsatisfied with what you offered to them, good look!!! To know whether your purchaser is happy or not, send email surveys and ask for a rating. Once you have enough positive feedback, simply ask them to promote the product on social or YouTube channels.”

– Syed Ali Hasan, Film Jackets

Offer an incentive if they provide referrals

Sometimes people like to operate on a little quid-pro-quo, and honestly, it’s only fair to offer a favor in return for a favor. By providing a little motivation – like perks, discounts, money, or extras, you give people a personal incentive to want to get you referrals.

The one tip I have is that no benefit in the world is better than money. If you really want to compel people to refer others to your business, you need to save them money. In other words, for each successful referral, award your customers with a monetary incentive.

– Carsten Schaefer, crowdy.ai

Following up with emails asking how your customers are enjoying your service or product can help to get referrals. Try to be genuine and then when you need to you can ask if they’d be willing to briefly give you a referral or quote for your company. Another approach that some businesses can use is also to offer a coupon code or other types of special deals in exchange for referrals.”

– Alexander Reichmann, iTestCash

We offer a 15% commission for any new clients a customer brings on-board.”

– Angelo Frisina, Sunlight Media LLC

The first tip I would recommend for companies trying to boost their customer referrals is creating an incentive structure that makes referring attractive to customers. The thing is, you have to understand that customers are humans, and they (just like you) won´t want to spam their friends with irrelevant stuff. So you should focus on making your product sharable and creating incentives to make that happen. I´ve seen that both of these tips, if implemented well, can boost referrals up 20%.

– Pedro Copelmayer, Timit 

Don’t turn it into work; make it easy for customers to refer you

Ultimately, you’re asking for a favor that will take a little time. Help your customers out by making it easy for them to recommend you. Adding too many steps in the process like having to dig up your info or reciting your elevator pitch requires work and makes people less likely to follow through. Landing referrals should be a quick, effortless process for your customers and nothing more.

When it comes to customer referrals, our number one tip is to make it easy for others to share your story.

This can be accomplished in numerous ways, both on and offline. If you have a website, make sure that you have visible Share Buttons. They’re easy to install and allow visitors to share your content with a single click. And when you’re posting on social media, be sure to boost your posts so that they’re seen by all your current followers. They’re the ones most likely to share and retweet, so make them part of your target audience when running paid promotions.

Finally, provide your offline customers with extra brochures and catalogs and ask that they share them with others. Most customers are more comfortable with passing on this type of literature, since it saves them from making a sales pitch on your behalf.

– Tom Matun, Powder Mix Direct

Encourage social media sharing among your existing customers and followers. Studies show people are more likely to try products and brands that are recommended by their friends or are being talked about by their friends on their social media.”

– Avinash Chandra, BrandLoom

Leverage LinkedIn. This career-oriented social media has many benefits besides growing your career. You can start marketing your business via there and network with top clients. And on the other hand, you can also make sure that you use your referral links to gain momentum.

Act on positive feedback. This means that, when you receive positive feedback on your product, make sure that you provide them with a positive incentive.

Distribute your content wisely and creatively. Leverage every other social media platform for your marketing.

– Adeel Shabir, Gigworker

Provide excellent customer service and over-deliver

Sometimes you don’t need to do anything and customers will refer you on their own because they’re just that impressed with your business. Focusing on wowing your customers and keeping them happy may be all the motivation they need to start spreading the word – especially if they run in circles with other people who could use your help.

Businesses can get customer referrals by delivering results first. If you over deliver, offer value every step of the way (even before making the sale) and follow through with solid results and outcomes, the referrals will come naturally. Plus, you’ll feel confident in asking for a referral.

– Amber Vilhauer, NGNG Enterprises

“Remember when you give a referral, in the meantime, you give a little of your reputation away. In case of the business you’ve referred someone, performed a good job, it subsequently helps your reputation. But if counterintuitively it does a poor job, your reputation may be damaged poorly. This possible “reputational risk” is one of the reasons why some customers won’t tend to refer to products and services to their friends.

– Aqsa Tabassam, Brandnic 

Real results from asking for referrals

Ok, that’s a lot to take in – and on top of that, you’re probably getting bombarded with business advice from everyone in your circle (whether they’re actually experienced or not). So by now you’re well aware that talk is cheap, and you’re looking for actionable advice that will get you RESULTS. 

So of course we asked our same entrepreneurs how their systems (the exact ones they’ve been describing in this post) actually impacted their customer acquisition and overall success. Here’s what they had to say: 

“My company has executed this method for years, providing excellent customer service and outcomes for clients along the way. As a result, we have over 900 positive, unprompted video testimonials referring our services.”

– Amber Vilhauer, NGNG Enterprises

We’re in the SaaS industry which functions on a subscription-based model. Every customer who refers someone new gets a free month of our service, essentially saving them more than $50. The more people you refer, the longer you get to use our app for free. It’s a pretty generous system that works really well for us.”

– Carsten Schaefer, crowdy.ai

Social sharing has helped us reach out to a wider audience and generate leads.”

– Avinash Chandra, BrandLoom

It goes over a lot of customers’ heads to refer, even if you’ve done a fantastic job. A suggestion goes a long way in keeping your business in your clients’ minds. This tip has helped us get a lot of referrals that, without it, we wouldn’t have gotten.

– Joe Flanagan, Tacuna Systems 

What NOT to do when asking for referrals

As you can see, there’s TONS of creative ways to leverage your existing customer base and ask for referrals – with a little brainstorm sesh you can probably think of a few that haven’t even been mentioned here. That doesn’t mean every idea under the sun is fair game, though. So learn from these business owners’ mistakes and avoid these pitfalls when asking for referrals for your business.

Avoid spamming your customers with referral requests 

In terms of what not to do, our advice is to never ask more than once. A friendly hint to share your story is usually well received. However, going beyond that can come across as being needy.

– Tom Matun, Powder Mix Direct

Don’t spam your followers telling them to recommend your brand or give repeated reminders about referrals. This annoys your customers or subscribers and you may end up losing them.”

– Avinash Chandra, BrandLoom

Don’t demand. Ask respectfully but don’t badger clients for them.

– Shaan Patel, Prep Expert

Don’t make it complicated or ask for too much

The thing you should definitely not do is making it complicated. If you are an online broker, for example, don´t put complicated layers into the referral (I´ve seen things as absurd as getting a free stock worth 10 dollars after depositing 1000 dollars and having made three trades.) Obviously run the math so the unit economics make sense, but also try to make it as simple as possible.

– Pedro Copelmayer, Timit

Never make it difficult. Because if you ask customers to promote on multiple channels, this would be impossible as not everyone is a YouTuber or uses multiple social channels. Keep it simple, short, and easy as possible.

– Syed Ali Hasan, Film Jackets

“Don’t try to create your own affiliate system, don’t self-host. It’s all been done before and it’s time-consuming and expensive.

– Debashri Dutta, Blog Tyrant

Try not to be vague – be clear about what you’re asking for

When requesting for a referral or setting up a referral scheme, be specific with the kind of referrals you want. Referrals to vegetarians to a butcher shop are absolutely useless.

– Joe Flanagan, Tacuna Systems

“Never consider the feedback as your customer referrals. If you intend to do so, first take permission from the customer. You need to figure out the blurred line between customer feedback and referrals.

– Aqsa Tabassam, Brandnic 

DON’T offer incentives

Hold the phone! Earlier we told you it’d be a good idea to offer incentives when asking for referrals for new customers, and now we’re telling you NOT to do it? That’s a fair complaint.

Here’s the deal: offering incentives is a contentious topic and often gets debated. There’s pros and cons to doing it and it’s only fair to share our experts’ advice and let you decide which approach makes most sense for you and your business.

We would not recommend offering to pay for referrals unless your business is primarily affiliate or reseller driven. People like to receive a genuine referral-based off of a great experience being shared.

– Kacy Carlson, Updog

One thing I don’t recommend is offering incentives. If someone is happy with your service and the quality of care they received they’ll be happy to refer you. You don’t need to offer incentives and IMHO it comes off as disingenuous, you’re buying a referral instead of earning it.

– John Frigo, Surgical Suites

Where to start with customer referrals

Phew. That was A LOT of information, and helpful as it was, now you’ve gone from questions to having so many options it’s not even feasible (or necessary) to attack them all. Here’s some steps to help you gradually get started with your customer referral campaign.

  • Start with the easiest step: Pick one or two (we mean it, just one or two to start – going too big too fast will be a lot to mange, plus having too many variables in your strategy will make it impossible for you to tell what’s working and what to ditch) referral strategies and start there. Choose the one that makes the most sense for your business. If you already have a great social media presence and engaged following, get your active audience to ask for referrals or even just share your posts with their community. 
  • Communicate your “referral policy”: If you’re still feeling awkward asking for referrals, make it known to your customers and put the ball in their court. Add that information right to your website, social pages, or even your email signature. Although in this case you might need to add an incentive for them to act on it since you won’t be directly asking. 
  • If you’re team “Pro incentive” ask your customers what [reasonable] perk they’d like to see, and then make that your incentive. Giving them something that you know they want will likely get you more participation than guessing. They might not be motivated by a 10% discount if they don’t plan on shopping with you again, but just a cool $50 might give them the gift of gab when it comes to your brand. 

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