The Power of a Good Word

Referrals are among the most effective and least expensive marketing tools available to small business owners. People don't always trust an ad or sales call, but they do trust their friends.

Think about the places you've done business with in the past week, month, or year. What first led you to those establishments? Was it an ad on TV, on the radio, or in the newspaper? Perhaps a piece of direct mail? Maybe a billboard or website? Or a particularly persuasive sales call? All of these are effective means of marketing to the public. But none is as effective as a referral from a colleague or friend.

A referral from a friend will carry far more weight in most people's minds than the cleverest ad or most well-articulated sales call. So how can you generate more referrals for your company?

• Model it. If you want your customers to start referring people to you, refer your friends and colleagues to your customers' companies, too. Reciprocity is a powerful thing. If you refer business to others, they will be far more likely to refer business to you.



• Ask. When you meet with established customers to follow up on a sale or just to check in, ask if they know anyone else who might need your services. Even if they can't think of anyone on the spot, your question will plant a seed and remind them to think of you when they do come across a friend who might benefit from what you sell.



• Offer an incentive. Provide a discount or special thank-you gift for those who do provide referrals. Make it something fun and worthwhile that will make your customers realize how seriously you take their business. In some cases, that might mean a month of free service, a free upgrade or enhanced service plan, or some other unique perk available only to them. Tailor your incentive to your own specific business and customer base. You may also want to offer a discount to the prospect who was referred.



• Keep doing what you're doing. If you're providing outstanding service and support, along with exceptional products and services, referrals will come. If someone enjoys doing business with you and feels like you're providing good value for their money, it's almost certain that eventually they will start telling others about you and talking you up with their friends and colleagues. Of course, the opposite is true, as well, so make sure you're providing the kind of service worthy of a positive referral.



• Say thanks. Whether you have a formal referral program or not, when someone tells you they were referred by a friend, make a point of thanking that friend. Even something as simple as a hand-written note in the mail will let your customer know how much you appreciate their kindness.