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 basic premise is that you should always have “reason why” you perform any specific marketing or sales promotions. Secondly your marketing should always provide a “reason why” customers need to listen to you, buy your product, take an action etc.

The concept can be difficult to explain properly so ill just give some bullet points to clarify:

1. Any specific promotion or “sale” or discount or other type of special offer you have going at a specific point in time should always have a reason why it’s being done. And this reason needs to be shown in your marketing.

For example, you should never just have a “sale”. You should have a “sale” because its Easter, or it’s the business’s birthday or any other type of reason you can come up with

This is because customers will always expect you to have low prices you’ll usually have on a specific sale, and why  shouldn’t they? If you can afford to drop your prices for no reason for a “sale”, why can’t you just use those prices all the time? Are your usual prices actually overpriced?

I’m sure you seen many “sales” in your time, and wondered to yourself if they really even dropped prices, or if they simply put the posters in the shop just for some sort of marketing stunt.

Giving reason for each promotion stops prospects from always expecting you to have a sale on or always expecting discounts, and wondering on the trustworthiness of your supposed promotion.

1. Always have reason why customers should buy from you. This ties closely with your USP, and if your USP is well done, it will already include the reason why you should be chosen over your competition.
2. Always have reason why they should trust you. What compelling reasons are there that you claim to be the best (as per point 2 above) and why you can be trusted.
3. Always provide a reason why they should act on your offer right now. Why should they seize the opportunity today and not some time in the future.

So far we have gone over how to increase the lifetime value of each customer by increasing the number of purchases (part 1) and then we discussed increasing the value of each sale (part 2)

Part 1 and 2 focused on great cost effective ways to leverage your existing business to increase your profits and I hope you got some great ideas already, but more importantly, I hope you have taken action on what you have learned so far.

Part 3 will be looking at leveraging existing lead generation sources such as advertising or referrals, direct marketing etc (don’t worry, well discuss those in part 4) and increasing the number of sales you get from existing leads.

You may have wondered previously why generating more leads has been the last section we discuss and the simple reason behind this is that generating new leads and prospects is the most expensive and time consuming activity in your marketing plan.

Additionally there is much less value in generating new leads if you have no back end sales funnel to generate additional sales from these new customers, no sale value increasing strategies in place to maximize the value of each sale, and lastly, no optimized sales process to maximize the percentage of new leads which convert to sales.

You see, once you have the first 3 steps implemented & optimized you will have much more leverage and power when it comes to lead generation, since you will be able to spend much more on advertising and other lead sources simply because you now make much more revenue per new customer than ever before!

So, let’s begin with your incoming call script.

Right now, im going to start of with a quick example of a back end sales funnel:

As a personal fitness trainer, your core business may be a once-a-week fitness training session, which is what you market and sell to new prospects.

Most personal trainers and other health professionals will only focus on their core offering, and will never realize they now have a customer who has already put their trust in them, and are now prime targets for additional sales!

So, on week 2 at the end of the first session, you may discuss diet with your training customer, whereby you will recommend a great weight loss product that will maximize the results they receive from your fitness service.

Naturally, they can get this product directly from you, or they can purchase it from www.XXX.com (your special internet link whereby you generate commission on every sale).

On week 3, you can now mention to them that they are now ready to go onto the next level of supplementation, so you recommend product B.

On week 4, you mention that you know of an excellent book on dieting that has helped you get to where you are right now, and by following it as well as continuing to take the 2 supplements, they would get excellent results in combination with your training services.

This book and be purchased at www.XXX.com, another special link which generates you commission with every sale.

This is a very simple back end sales process for a fitness professional.

So, lets do some math:

Previously, let’s say the customer was spending R100 per day (1 hour session) for training, or R400 monthly.

Let’s say you have 30 training customers a month.

That’s R12000 per month you get for your fitness training.

Now, if you had implemented your backend process correctly, its easy to get an average of 40% to accept your back end offers.

That’s 12 customers who purchase the two supplements in month 1, as well as the book.

Supplement 1 makes you R100 commission

Supplement 2 makes you R80 commission.

Book makes you $120 commission.

That’s R300 for each of the 12 customers that accepted the other offers, each month.

So 12 customers R300 = R3600.00 additional for that month for only a small bit of time invested in recommending the products to your customers, at no additional cost to you.

Additionally, if the customer keeps purchasing supplement 1 and 2 each month you will get $35 per customer the following months as well.

Not bad eh?

The back end sales funnel can be very powerful and I recommend you experiment as much as possible with making additional offers to existing customers. Obviously each business is very different and you may think this is not possible in your business but I can tell you this is not the case. There is always opportunity to grow a back end in any business.

One important thing to note. You will see from my example that the additional offers to customers were made in the form of a recommendation.

This is very powerful. Remember in the introduction I mentioned that once the customer has already made 1 purchase from you, you now have their trust.

Well, this means that any recommendation you make for an additional product or service that may help them is now coming from somebody they now trust and thus you can expect a very high percentage of them to go with the recommendation.

Actions:

1. Sit down and consider your current customer base. What additional products or services do you think will complement (not compete!) with your current offering. What other products or services are targeted at your specific group of customers?
2. Once you have developed this list, are there any products or services you can offer them directly. Perhaps a new service you can create?

Remember, it is usually more profitable to offer them your own services or products, then it is recommending another service or product for a referral or commission fee.

1. Finally review your current business and customers and try and find points in time and opportunities to make your recommendations.

It’s important to note right now that an offer sooner than later is more likely to result in a sale, as customers are more likely to make another purchase very soon after the last one.

Backend offer 1 and 2 should ideally be made within the first month of the initial offer, after then your conversion will go down.

In the next few articles, we will look at the different types of backend offers and strategies you can employ.

The sad thing is that most small business owners simply don’t understand most of these strategies and many even think of marketing as handing out fliers or branding coffee mugs.

In so many cases understanding these fundamentals can be the difference between running a successful profitable business or failing miserably.

This course will contain easy to understand actions you can implement to obtain measurable results in your business, so I implore you to read through it all carefully and TAKE ACTION by implementing these steps.

The course is broken up into 4 parts, which, incidentally, are the only 4 ways you can possibly grow your business:

1. Generate more sales from existing customers
2. Increase the value of each sale
3. Convert more leads to customers
4. Generate more leads

We begin with part 1 which covers leveraging your existing business to increase revenue generated from existing customers.

Its a well known fact that it can be up to 10 times easier selling to existing customers or those that have purchased from you before, then it is to obtain a new customer.

This means that the fastest way to grow your business and increase revenue right now is to focus on generating additional sales from existing customers.

In part 2 we focus on increasing the value of each sale. By doing this we attempt to get prospects who have already decided to buy from us, to spend more then they may originally have intended.

Part 3 focuses on converting more existing leads into customers. This leverages existing lead generation sources such as your current advertising, and attempts to convert as many of these leads into paying customers as possible.

By doing this we generate more sales and profits with a minimal increase in marketing expense.

Lastly we look at generating more leads for our business.

You will see that our initial focus is maximizing our return on current business, customers and marketing spend, before we invest any additional spend in generating more leads.

This allow you to easily increase revenue sometimes up to 100% without spending a single cent more on lead generation then you are spending right now.

This also means there is no longer any excuse to not implement these steps right away, since most of them can be done with only time invested, and not cash.

Now, before we begin with Part 1, we need to first take a look at your offer as well as your USP (unique selling proposition). Every bit of our marketing will be leveraging your USP and thus its critical that we get this right first.

CLICK HERE TO CONTINUE WITH PART 1 – UNIQUE SELLING PROPOSITION