Small Business Referrals
How to get more referrals, including when and how to ask for them, to grow your small business with serial entrepreneur Henry Lopez.
On this episode of The How of Business podcast, Henry Lopez focuses on the topic of small business Referrals. Why are they so critical to the growth of your small business, how to ask for referrals, and how to encourage your best clients and customers to refer you to their friends and family.
FREE DOWNLOAD: Small Business Referral Tips
What is a referral?
- Referrals are the most effective and cost-effective, way to grow your small business. But asking for referrals, like trying to close on a sale, can feel awkward. You don’t want to come across as desperate or pushy or presumptuous.
- A referral someone who is currently in the market to buy your product or service and they have been told about you by someone they know and trust. The referred potential client knows something about who you are and what you do when you connect with them. It is, of course, stronger than just a “lead” or a cold call.
Why do we need referrals?
- We want more like our best customers or clients to help us grow our small business.
- Lower cost of customer acquisition.
- For Service-Based Businesses and most B2B companies – referrals are the life-blood and the future of your small business. If you are not growing through referrals, you may be doing something wrong. And even for B2C businesses, referrals are important – you may just get them differently.
- Some examples of business that rely on referrals: Insurance Agent, Real Estate Agents, Financial Services Providers, CPA/Accountants/Bookkeepers, Attorneys, Business Consultants or Coaches, Free Lancers, Travel Consultant, Contractors.
When to ask for referrals?
There are lots of different opinions on when and how you should ask for a referral. You must experiment and use the approach that works best for you and your business. But you can’t hide behind being too embarrassed or afraid to ask!
- In episode 78 of The How of Business, guest Stacey Brown Randall shared her tips and techniques for creating more referrals. For high-touch businesses, where your client has to meet you, Stacey recommend a developing and taking a Human-to-Human approach. Clients need to know, like, trust you before they will refer you. She believes in “Never asking for referrals – it’s just not me”. Instead, she sets the tone and shares with her clients that she builds her business through referrals.
- In episode 38 of The How of Business, guest Tim Templeton shares some tips from his book “The Referral of a Lifetime” including the approach of getting more “Qualified Pre-Indorsed Referrals”. He also believes in developing relationships, delivering value first, identifying “Power Advocates” and then educating them on what you are looking for in the way of referrals.
Developing a Referral Program:
Notes and tips on developing an running a Referral Program for your small business:
- Reward the behavior of referrals with a personal thank you.
- A simple process for referring and getting the reward.
- Promote your referral program.
- You should track:
- Who was referred and who referred them?
- When were they referred?
- Whether or not they converted or were sold?
- How are you going to nurture and follow up with them?
- How and how much will you pay them?
Top 5 Tips for getting more referrals:
- Ask! – Whether directly or indirectly, you have to ask!
- Ask you best clients or customers – your connectors.
- Deliver an experience that makes them want to refer you.
- Reward Referrals – create a simple and easy referral program.
- Cultivating referrals must be an integral part of your business process.
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Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.
Books mentioned in this episode:
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- The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell
- The Referral of a Lifetime by Timothy L. Templeton
- Generating Business Referrals Without Asking: A Simple Five Step Plan to a Referral Explosion by Stacey Brown Randall
- Business by Referral: Painless Ways to Generate New Business by Ivan Misner
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