Referrals for the Win
MExponentially increase your client list by implementing a formal referral system.
arketing and advertising is the most expensive item for most businesses today. Getting that new client in the door the first time can require a monumental amount of time, energy and money. Once landed, the biggest mistake most service providers make is not maximizing the benefits of said client. Their most valuable commodity, contrary to popular belief, is not the fee they will pay you for the service you are providing on the short term. They possess something far more valuable: colleagues.
But how do you get to them? Here’s a little secret: if you implement a formal referral system, you don’t have to — they will come to you. If done properly, this could be the single most transformative experience of your business career. The Referral
ABCs Why are referrals so powerful in the first place? There are two key things at work here. First, since you’ve already provided excellent service to your existing client, you now have street cred. No amount of marketing can get you this. Your client can now, in good conscience, tell his or her colleagues all about you and how great it is to work with you. That’s often enough to illicit an inquiry if not go right to proposal phase for the new, referred client. Secondly, your existing client is now functioning as an influencer. Having a champion of your cause on your side carries infinitely more impact than trying to cold call or pitch a new potential client out of the blue without anyone to vouch for you.
To get started building your system, it must first have a name. This name will be seen by each and every one of your clients in email and/or printed literature. Secondly, it must spell out the terms clearly, simply, and prefera- bly in bullet point form. No long paragraphs, fine print or confusing conditions. Make it as simple as possible, automatic and free.
To really make it stick, you need to incentivize your system. The terms need to highlight that if a client refers you to one of their colleagues, you will give their colleague a 20% first-project discount as a way of saying thank you. You should also give a commission as a reward to your client for making the referral in the first place. Use your own judgment, but 5% is a good place to start. Keep in mind, this reward is not just a one-time thing, but rather a perpetual system that rewards your client for each and every new project generated by all of their referred colleagues. This reward can be redeemed in the form of a check paid directly to them or their business, or the current running total could be used as credit which can be applied to any invoice(s) of their choice.
… And the Numbers The key to making this work is to focus on the word “system.” Your rewards program must be presented to every one of your clients on a regular basis. Ask them to participate. Tell them they are already enrolled and that they don’t have to do anything except refer you to some of their trusted colleagues and they will receive rewards automatically which they can redeem at their leisure. Asking them to participate will generate far more referrals than simply presenting the information to them and hoping they will oblige.
And here’s where it really gets interesting. If one client generates three new clients for you, since you are now implementing this system to each and every client automatically, those three new clients can easily generate three each, thereby amassing nine new clients with no new marketing and advertising costs. And then those nine new clients can generate three new referrals each, boosting the running total to 27. Those 27, if they produce three referrals each, now total 81 new clients, so on and so forth. You are essentially getting all the leverage and power of network marketing without being involved in a network marketing business.
Design, develop and implement your formal referral system now and in less than a year you could completely transform your business from a struggling mom and pop shop to an unstoppable force with dozens, hundreds or even thousands of clients — all without spending the massive amount of time and money it would take to acquire these new clients from marketing and advertising alone. Martin Grebing is an award-winning animation director, producer, small business consultant and trainer. He is President of Funnybone Animation and can be reached via funnyboneanimation.com.