Creating Successful Referrals In Your Business
How to have your customers build your business for you
August 2, 2009 - © David Newton

It’s been said that acquiring customers can be an expensive exercise. You place an advert, and aim to make a sale on your prospects first interaction with your business. We all do this to build our businesses, especially at the beginning. But this isn’t the only way to go.

After you’ve made the sale – what comes next?
While working at a commission based sales position at a company some time back, we were all asked to write down a list of at least 100 names of people we knew. Hey its easy to get an appointment with the people you know that with strangers right? Well it worked for me. And others in the team go going very fast just on this first leg of our training.

Next thing was – we all were asked to get names of at least 8 people at each sales presentation we took with the ones we had an appointment. What’s more, we were asked to get names regardless of if the prospect bought the product or not. Again another thing I observed was that prospects were just as willing to “help out” with referring new names and contacts along the way.

Asking was easy – we had a series of prompts for them such as; Who do you know who has – recently changed jobs? Who has started a new business? Who has had a birthday recently? With a set of easy questions prospects often found they knew lots of people and gave us a big list of names with little effort or worry. We weren’t asking who would buy the product, just the names of people they knew.

Fast as we went though our first ‘100 List’ of names we were replacing them with new names – connections to the initial list at an expanding rate.

In fact, the selling got easier, due in part to the referrals coming from trusted sources from our list of contacts.

Centers of Influence
From our first names and the referrals from them we were also told to nurture “Centers of Influence” – so what they? These are people who have a position in the community, or are by themselves overly helpful people, or people within their own business have a big list of names and can direct those people to look at other offers deemed worthy of their endorsement.

The idea was the build up a stable of these influential people over time and to spend time with them – lunch them, write to them, buy them occasional gifts or refer to them potential clients of customer for their business too.

One guy I knew had an extremely successful business using this very technique. He sold finance and built up about 10 good referral centers which delivered to him about 80% or more of his business. He said it took some time, and his motivation to build a successful business was that he had a huge mortgage and several kids at school. But he was doing so well he was the highest income earner in his office. Such is the power of referrals.

Adaptation To Your Business?
Yes, each business is different. I hear this everywhere. But sales systems will work regardless. You simply need to see your business as a sales business first then seeing how to implement getting referrals will be easier for you.

Referrals are going to happen via regular “Word Of Mouth” or via the more recent term “Word Of Mouse” i.e. via online methods.

The advent of a city centric based book known as The Entertainment Guide does this well. Cafes restaurants movie cinemas etc and many other places have two for one offers. These help the user of the book claim coupons with their friends and go to places they may have not been to before. Well that’s fine for low ticket items, but what about high value sales?

What Some Businesses Are Currently Doing To Get Referrals

Recently I went to a seminar in the inner suburbs of Sydney promoted by a huge brand name business coaching crowd. They had a cute technique of getting people into a free series of seminars and asking applicants to bring their friends along. Sadly I didn’t see them do any kind of referral based selling at all with their existing client base. And they were still cold calling clients from the yellow pages. However some of their coaches had their heads screwed on right and did use referral selling – out of 8 sales people – only ONE did this, amazing.

On the other hand I met a very humble yet slick dressed sales executive from a business association who sold memberships, he was their top salesman. His clients came almost 90% from referrals. I asked him why so? He said that he kept prospects on his own email list. He phoned them regularly and asked them to special meetings such as breakfast meetings or evening cocktail parties the group was holding. In fact many prospects could never make it, but referred others who could take their place, and thus he made sales left right and center!

A personal development training company based at Pyrmont Sydney uses a referral technique very well. While attending their courses at almost every meeting – some of these are 3 day weekend course events held from 9am to midnight. They absolutely insisted that you call and bring your friends workmates and family members to the previews or you don’t pass the course. The average sale each seminar brings is around $600 to some courses at well over $1,200 and the seminars are often packed at over 100 or more at each course. You’ll even see some people doing the course flying in from places like Brisbane or Melbourne to attend the courses. That’s the power of their referral sales techniques.

This training company spends no money on newspaper ads and certainly none on television or radio, about all they spend is on are some brochures about the courses, that’s about it. They turn over in the millions – all via referrals!!! I thought the courses were fairly simplistic, but the sales methods were extremely outstanding.

Fact is this company has many clones doing the same thing, but its sheer proof that if you look at it with a serious manner, you can make big returns.

Tracking Your List

Maybe one thing that makes referrals work is how you track the names, communications and what you said and when you’ve met with your prospects. If you are going to do this right and make it work, you’ll need database systems, a regular newsletter and make phone calls to your new and existing clients, and prospects.

You can stimulate the list with the occasional event, such as a seminar, dinner evening, or maybe a wine tasting afternoon. But the best results will come via meeting prospects one on one and talking with them, making presentations and asking for new names to replace the list as you go though it progressively.

You see, the exciting thing about working via referral is that it can take you many places and help you meet wonderful people along the way apart from just making sales and new clients; it really makes fun the idea that everyone is connected to everyone else.

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David is an avid social networker. Discover some of his business and social communities at these websites: Entrepreneurs Sydney www.EntrepreneursSydney.com  and Panache Singles www.Panache-Singles.net  plus read many interesting articles on www.AusLifeCoaching.com 
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