by Steve Houston
Do you know how many referrals per client you averaged over the last 12 months?
This is a really important number to know, but if you’re like most business owners or marketing executives, you have no earthly idea what it is.
Referrals are the lifeblood of many companies, so simply relying on whatever referrals happen to come your way is a haphazard and dangerous way to do business. You need an easy, manageable and repeatable process to help you get more referrals for your business.
One of the best sources for referrals is also one the most frequently overlooked, and it’s this –
If you want to continue attracting new customers, the fastest way to do it is to get each of your current or recent customers to give you a new referral.
Not only can this quickly boost your business but…
- It can also help reduce your marketing expenses because referrals are free.
- Referred prospects convert more easily because they’re coming to you from a source they already trust. They are motivated buyers and will frequently have a lower price resistance than others attracted to you through other methods.
- A new referral client is more apt to refer new prospects to you than clients obtained through other types of marketing, so multiple referrals are not uncommon.
Want to boost your referral rate? Remember these 2 things: Measure and Hold Yourself Accountable.
Measuring involves 2 statistics: the first is overall referrals expressed as a percentage of new monthly business, and the second statistic is the average number of referrals per client / customer / patient. You want to continue “averaging up” both of these.
You and your staff should review these 2 metrics regularly because they’re key performance benchmarks with a direct impact on your sales revenue.
Holding yourself and your staff accountable for actively and consistently generating referrals is the second key ingredient. Ask yourself:
- Who have I spoken with today? Were any of those good opportunities to chat about referrals?
- How many of today’s customers did I actually ask for referrals?
- How else have I furthered my referral goals today?
Here’s why incorporating this thinking into your daily business activities is so important –
When you measure something, performance improves automatically, and performance inevitably tails off in the absence of quantifiable feedback. Just ask any pro athlete. However, when you do measure and hold people accountable, stability follows and, naturally, so do performance improvements.
In business, you must know your key metrics. You can’t effectively manage what you don’t measure, so here’s a simple method to help you achieve your “offline” referral goals.
Let’s assume you’re currently averaging 1 new referral for every ten times you actually speak to a client or patient about referrals. And you’ve set a goal to get ten referrals in the first half of the month. How many clients / customers / patients do you need to talk to?
You’ll need to talk to 100 people. Divide 100 by 15 (the # of days in the first half of the month) and you’ll get 7 discussions per day. Break this down even further and now your goal is to have 1 referral discussion per work hour each day.
Keep track, and when you find yourself regularly chatting with a client / customer / patient about referrals each of those hours, you’ll hit your target. Forget to do it one hour? No problem – just double up the next hour. It’s all about getting in the habit of doing it consistently.
It’s not complicated and it works. Set your staff’s and your own goals using a similar formula and process and watch your new client / customer / patient referral rates soar.
Bottom line: Simply holding yourself and your staff accountable for generating referrals – and measuring the results – can literally explode those new client referral rates your business depends on so heavily today.