How Your Customers Can
Build Your Business
By Tom Egelhoff
 In
past articles I've discussed how powerful word-of-mouth advertising
can be. There is another powerful tool, widely used in the business
world and that tool is the referral.
With word-of-mouth people mention or talk about your business
but with the referral they actually recommend your business to
their friends and neighbors. And they usually do it with some
enthusiasm. (Also See: How To Make
Word-of-Mouth Advertising Work For You)
I'm sure this tool is no secret to you and you may have even
tried to use it a time or two. But, unfortunately, many business
owners find that asking customers for a referral is somehow rude
or insensitive.
It often makes them feel uncomfortable. If this is true of
you then the only thing I can say is that you are doing it wrong.
Let's look at the right way to do it And how to build your business
by doing it efficiently.
Where to
start
Have you ever recommended a book or movie to a friend? Most
of us have. Why do we do that? Simple. We feel comfortable with
our friends or family and they are the most likely persons to
receive our recommendations. We know them and are familiar with
what they like. If we think they will like a book or movie that
we like we let them know about it.
What we don't do is run up to strangers on the street and
try to tell them about this great movie we just saw. The point
here is that before we can ask for a referral from anyone there
must be a comfort zone established between us and this hypothetical
customer.
Over time you will establish a track record of performance
that will make your customer comfortable enough with your product
or service that they can recommend it enthusiastically to their
friend and family. Let new customers know that you hope they
will become loyal customers who return again and again.
Usually this will not happen overnight. Some exceptions might
be one time sales or sales that are few and far between.
You might recommend a house painter, for example, who only
painted your house once but did a good enough job that you would
feel comfortable giving them a good recommendation.
How powerful
is the referral?
How powerful? Consider this. Studies show that the average
number of people who attend a wedding or a funeral is approximately
250. Each one of us knows or comes in contact enough with 250
people that they would feel comfortable attending our wedding
or funeral. Two hundred fifty people who are more than just casual
acquaintances. Each person has that power. How many customers
do you have? Multiplied by 250.
The other powerful part of this scenario is that we tend to
make friends with people like ourselves. People who make $100,000
per year rarely pal around with those making $20,000 per year.
Customers who can afford your product or service are usually
friends with others who can afford your product or service. They
will rarely send you unqualified prospects.
Tell it
like it is
I'm sure that during the course of your life you've had a
business or service that you really liked go out of business.
They were so good how could they possibly not survive? If you
are providing a worthwhile product or service your customers
want you to stick around for a long time. Many will probably
ask you what they can do to help your business.
Let them know that word-of-mouth is the best way to grow your
business. "Come back and bring your friends." Reward
those who bring in new blood. Don't forget your employees. They
want to continue working ask them to bring in their friends and
family if possible. Reward them for the new customers they bring
in. This doesn't have to be expensive. Recognition with an award
at a company meeting is often enough.
How and
when to ask for referrals
The biggest mistake most people make in asking for referrals
is that they treat is like a favor. "Could I ask a favor
of you?" "Would you be willing to give me the names
of people you know who might need my services?" This is
the wrong way to ask for referrals.
Look at it this way instead. Think of the referral as just
another product in your line. What do all products have? Right....features
and benefits. So what is the benefit to the customer to give
you a referral? The customer has a natural fear of loss in giving
a referral. A friend may ask, "Hey, why did you have this
salesman call me?"
Let your customer know that you want to build your business
by referrals. The best way to do that is to provide a consistent
level of service that the customer will feel comfortable giving
you those referrals.
If you are unable to get a referral ask for a testimonial
letter instead that you can show to other prospects. In a small
town this is almost as good as a referral because so many people
know each other. Sooner or later they are going to know one of
your testimonials.
The best time to ask for referrals is when the customer has
been satisfied. If they are complimenting you on your work they
are a fan of yours and will want to share their happiness with
others. Tell them that you will not let them down if they refer
you to others.
Rather than just asking them for names it's better to ask
them if you can do a little brainstorming together. They probably
aren't going to be able to think of anyone off the top of their
heads but you can help them focus.
For example: You might know that they are a member of Kiwanis
or Rotary or some other service club. You might ask, "Who
in your Kiwanis club do you think I should talk to?"
Always collect as many names as possible first and then go
back over the names for more details that will help you with
that first meeting with them. Such as how does the customer know
the prospect? How long?
Don't forget
your printed materials
Make sure to add something in your brochures and business
cards about referrals. "94% of XYZ's business comes from
referrals from our satisfied customers." If you're a new
business that's about the right percentage. Probably all of your
early business will come from referrals.
Don't forget the answering machine. "Thanks for calling
XYZ Company. Please leave your name, number and the person who
referred you."
Don't forget
people who are not your customers
Here in Bozeman, Montana, my current home town, there are
many companies that never do a dimes worth of business inside
Montana. But that doesn't mean there are no business building
contacts here.
Finding business is nothing more than effective networking
with others. Many of us have friends or relatives in other states
or countries. Let them know what you are doing and who do they
know that might need your products or services. (Also
See: How To Build Your Business By Networking) and
(How To Make Friends And Turn Them Into Customers.
The Last Word On How Customers
Can Build Your Business
Building a loyal customer base is no different than building
a strong loyal group of friends. You provide a consistent level
of quality and service and treat customers, not as numbers, but
as true associates that will champion your cause to others as
they go about their daily lives.
(Return
To Small Town Marketing.Com Main Menu)
Listen
to a radio interview with Tom and Entrepreneur Magazine - Click
Here!
This article may be reproduced for your non-profit
group or organization provided it is not altered in any way and
the following is attached:
©1998 - 2004 Eagle Marketing PO Box 271 Bozeman, MT
59771-0271
http://www.smalltownmarketing.com - (406) 585-0219 - Toll FREE
(888) 550-6100
email: tommail@smalltownmarketing.com
Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your
Business Or Service In A Small Town, and The
Small Town Advertising Handbook: How To Say More And Spend Less.
He is also a seminar and workshop presenter
and trainer. He may be reached at 888-550-6100 or PO Box
271 Bozeman, MT 59771-0271
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