Referrals work very well by leveraging this aspect in existing (happy) customers & partner relationships and getting this “idea” passed on to other potential prospects your customers / partners have existing relationships with.

Referrals are great ways to generate new prospects that are of very high quality due to the fact that your leads have already received you as a recommendation from a source they trust in, who in turn knows, likes and trusts you.

Many businesses already receive much of their business from referrals however in most cases these are accidental referrals and not referrals due to a referral system you have actively setup and targeted.

Now, to maximize all the benefits of referrals, want to setup a referral system to take full advantage of this strategy

Let’s look at some points that make up a quality referral system.

1. You must have a target for your system, in terms of who you want to be your referrals sources.
2. Next you need a step that educates your potential referral sources.
3. Next, you need an offer or a motivation for your targeted referral source, to act as such. Give them a reason to want to refer others to you.
4. You must have a process where you execute your referral marketing. There must be a defined process to implement this strategy.
5. Lastly you need to follow up on results.

So let’s look at this in more detail.

Who do we target as our referral sources?

Obviously your first target would be your customer base. However in many cases certain types of customers are simply not able to or in the position to generate referrals for you. This can be due to certain industry issues, privacy or many other reasons.

Most of the time you will receive referrals from only a certain quantity of your customer base, consistently, and other customers won’t send referrals at all.

What you must do in these situations is approach that customers you are receiving referrals from and find out how they referred you, why they did and what aspects of your service they focused on as the reason for their referral.

You see, you may think the best way to generate referrals would be focusing on a certain aspect of your offering; however you may not realize how you are perceived by your customers. There may in fact be a far more effective value point that is resulting in referrals from this specific customer that you can now make use of when educating other customers on how to refer you.

Customers are great referrals sources but I want this article to focus on a much more effective referrals source so you can get the most value from implementing this strategy.

Your most valuable referral source are the strategy partners in your industry. Almost anybody who servers your target market can be an excellent referral source. Your service could be a complementary offering to the service they offer, or they may simply offer your target marketing another unrelated service.

Either way, if they are constantly communicating with your target market through their existing business, they are potentially a very valuable referral source for you.

A very common example is realtors referring mortgage leads to originators. There are most certainly opportunities for strategic relationships like this in almost any industry.

Your challenge is to get a bit creative and review every possible business that serves your target market in some way and consider how you can approach them to become a referral source for you.

Another benefit of this is that strategic partners may potentially have hundreds of new customers they can refer to you right off the bat, or over time, often much more than your customers may have.

This makes strategic partners a more valuable referral source to focus on initially for maximum return.

An excellent way to approach a referral source if you have no relationship with is to send them a communication stating that you have customers that may be interested in their services and you are requesting a “perfect introduction” template from them that would detail how you would go about “introducing” their business to your customers.

You then include the same “perfect introduction” summary document for your own business, as an example of what you need from them.

This strategy is very effective as you are address the “what’s in it for them” aspect right off the bat, and can expect a high response rate since you are potentially offering them new business.

At the same time you have give them the info and tools to refer you without looking presumptuous, as well as having now opened up the lines of communication between yourselves to build a relationship moving forward.

The secret of course in building any relationship with a potential strategic partner is always addressing the “what’s in it for them” right away. Once the lines of communication are open negotiations can begin in comfort.

The idea of this article is not to go into detail on referral systems and advanced tactics but to rather get you thinking about potential referral sources in your industry. Start getting creative and get thinking on how you can approach, and what you can offer potential strategic partners to secure them as a valuable referral source for your business.

The idea is to be able to generate reliable stable revenue from your customer base which puts you into a stable financial position as its now very easy to be able to forecast your revenue and thus create reliable future plans for your business and spend.

I don’t think I need to further emphasize the benefits of reliable monthly income, as I’m sure you can think of many right away.

The service plan or “maintenance contract” is usually something that is used in your more traditional service industry, such as IT for example. Whereby service companies sign contracts with customers at fixed monthly or yearly fees for X period of time.

With a little imagination however we can easily put this to use in any other business, I don’t really care what it is, there is always an opportunity to offer a recurring billing product.

Where possible, you should always offer something similar in your portfolio as its these recurring plans that offer you the peace of mind and reliable income in difficult times.

For example, a fitness or bodybuilding trainer can offer current customers a dietary program that monitors their measurements and weight and makes monthly adjustments to their diet plan based on their changing macronutrient requirements for R150 a month, or whatever it is worth to you.

Even though many customers could easily do this themselves, people are inherently lazy and would rather have somebody do this for them for a small fee, even if all they are really getting out of it I peace of mind.

With enough customers, these small monthly billings add up to good extra revenue.

Try to take advantages of opportunities for making your customers life easier by offering small additional services for a small fee. As an expert in your own business, I’m sure you can identify many opportunities for recurring services you can offer your customers for an additional fee.

Actions 1:

1. Investigate opportunities in your business where you can offer recurring monthly services to existing customers.
2. If you are considering offering your own service that takes up time: Calculate at what it price it would be worth it to you to offer these services, based on the time and admin it takes. Would you customers pay this price? If unsure, test it out on a few choice customers!

For example, if you are considering offering a certain service for a certain free, for a certain number of customers, and this would now take up 6 days of your time each month, will it pay you enough based on what your time is worth?

Lets say you used those 6 days to rather perform your core service, would you receive more revenue?

You need to calculate whether offering additional services is really worth your time or not, or you could be doing yourself a disservice.