How did you find your dentist? Your doctor? A babysitter for your kids? The chances are strong that you do business with someone who a friend recommended. More than any other type of advertising, we universally trust the opinions of friends and acquaintances. We even trust people we don't know as evidenced by the popularity of review sites such as Yelp.

Gaining referrals can be one of the most effective strategies for acquiring new customers and growing your business. There is one caveat: you have to ask for them. Think back to the time your friend recommended his dentist. He probably didn't start the conversation by raving about his dental care in the middle of a neighborhood BBQ.

More likely, you asked for recommendations when you needed a new dentist. What if the dentist had asked your friend to identify possible new patients? Or better yet, what if he had offered your friend a gift card for doing so? Maybe the dentist referral would have made for conversations over the grill, after all.

Referrals aren't always a natural occurrence, even when customers are happy with your product or service.

Why Referrals Matter

Simply put: more referrals can translate to more customers. But even more importantly, referrals mean better customers. Customers know who would benefit from your company's services better than you ever could. They're also likely to discuss your company as they make referrals, helping new customers be better informed about your services. As a result, referred customers are both more loyal and more profitable for the business. Less time and money is required to acquire them.

How to Get Referrals Automatically

You're always thinking about how to get more leads for your business. But are your customers? The answer is a resounding "no"--even if they love your company. Many customers are more than willing to help, but you have to be the one to ask. This process can be pretty time consuming, which is why it makes sense to automate where possible. When you automate the referral process, you ensure referral requests go to the right customers at the right time, without having to think about it.

Ask the right people for a referral

When you ask a customer for a referral, like asking someone on a date or applying for a job, you become vulnerable to an uncomfortable possibility: rejection. And even worse, if a customer doesn't like your company enough to give you a referral, it's possible that you've alienated them by asking for one.

The solution: Only ask for referrals from customers who like you. But how do you know for sure whether or not a customer is happy with you and your service?

Issue a survey as part of the post-sale process. Consider surveying the customer about a week after purchase, when feelings about your company--positive or negative--are still vivid.

While any survey will help you understand your customers' sentiments, a question like this is valuable for referrals: "How likely is it that you would recommend [your company] to a friend or colleague?"

Ask for a referral the right way

Even when you already know a customer likes your company, asking for a referral can still feel awkward. You don't want to be seen as pushing for another sale (even though that's exactly what you're doing and need to do). You can soften the sales-y tone by focusing less on how customers can help your company and more on how you can help customers and their friends.

Put the burden of facilitating the referral on you instead of the customer. Ask for their friend's contact information in a web form, send them a link to be shared via social media, or even offer a copy-and-paste message they can easily send to a friend.

When you get a referred contact's email address, don't get too excited about sending an email. Email service providers require a permission-based email strategy to protect their sender reputation and prevent emails from being marked as spam. The safest bet is to either call the referred customer or send a one-off email introducing yourself and requesting permission to send further communication.

Referrals can be tricky, but they are one of the best tools available to boost your business. If you have a happy customer, chances are they want to share that info with others. Sometimes they just need a little nudge.

Published on: Mar 21, 2017