4 Ways to Grow Your Business Through Referrals + My Thoughts
Referral marketing is a great tool to have in your marketing plan and the tips below show that it can be very effective but it does have its limitations.
One drawback to marketing the way this business owner is doing referral marketing is that is strictly one on one which can take quite a bit of time even when your target audience is B2B and your niche has a lot of personnel turnover.
Another drawback is that many of the people that he’s connecting with often move within a limited geographical area which limits his growth in other parts of the state or country. A few may move to another part of the country but he won’t be able to do the meet and greet at their new place of business as easily as he is locally.
By Melissa Kossler Dutton, Manta Contributor – October 11, 2017. You can read the article on Manta by going here.
For small business owners with limited marketing budgets, positive word-of-mouth is an important way to grow your customer base.
Since the Glenn Avenue Soap Company started selling its foaming soap to restaurants, co-owner Phil Metzler has learned a bit about the hospitality business. Namely, that it’s an industry with a lot of turnover. That’s why, when he begins supplying products to restaurants, he tries to familiarize himself with the entire staff.
“I introduce myself to as many managers and staff members as possible, and I try to get a phone number for them,” said Metzler, whose company uses natural and organic ingredients to produce soaps, skin care products and lotions.
He then texts his business card to everyone he’s met. The effort has paid off time and again when his contacts move to new restaurants and hire the company to provide soap for their restrooms. It’s not a traditional referral, but it is generating business, said Metzler, who does very little advertising for his company. He also brands his soap dispensers and has gotten new accounts when business owners discover his products at a restaurant they frequent.
Small companies need to be creative when it comes to finding new customers, said John Spence, a management consultant and speaker who regularly helps clients grow their referral business.
He recommends looking at what other businesses might appeal to your ideal customer. He once helped a luxury car dealer connect with a high-end boat seller. The two companies co-hosted an event where they had an opportunity to court the each other’s clients. “If you find a complementary business there can be great crossover,” he said.
Spence also suggests connecting with companies whose clients may need your services. “One of the best ways to get referrals is to give referrals,” he said.
Larry Titus agrees. The owner of Air Quality Solutions keeps a list of trusted electricians and plumbers for customers who may need those services in conjunction with a heating or cooling project. What started out as an effort to take good care of his customers has led to new business as those professionals recommended his company to their clients.
A longtime member of the local chamber of commerce and Rotary Club, Titus also has found that his passion for giving back to the community has generated business leads. But it’s important that you find a cause you sincerely want to help. Fellow volunteers will be turned off if it’s apparent you’re there to promote your business—not serve the cause, he cautions.
“I never ever tried to sell them anything,” he said. “I just worked side by side with them. It was a byproduct of that.”
Sometimes, it makes sense to refer a customer to a competitor, Spence said. Companies have different specialties and it’s important to recognize that. Often, it will improve your relationship with the client because they see the referral as evidence that you are looking out for them. It can also lead to referrals from others within your industry.
At Willis + Willis Attorneys, other lawyers regularly send clients to the firm, said managing member Stan Willis. “They’re looking for somebody to do a good job for their client—not steal their client,” said Willis, who estimates that more than 75% of his business is referral-based. “It’s always been our philosophy that if we take care of our clients, we’ll get more clients because we’re taking care of our clients.”
Here are the small business owners’ tips for building a customer referral network for your small business:
- Make sure you have a process in place for acknowledging everyone who sends business your way, everything from sending a thank you card to inviting a client who has generated a large amount of business to dinner or a round of golf.
—Stan Willis, Willis + Willis Attorneys
- Incentivize good customer service. Consider giving employees that earn a stellar customer service rating a bonus.
—Larry Titus, Air Quality Solutions
- Once you’ve established a relationship with a client who meets your definition of an ideal customer, ask them if they know anyone with similar needs who could use your help.
—John Spence, John Spence LLC
- Develop connections with multiple company representatives so your company is top of mind if they change jobs.
—Phil Metzler, Glenn Avenue Soap Company
You can read the article on Manta by going here.
This process can work well for a one person business but it isn’t easily duplicated when the business grows to the point that employees are needed.
If you supplement this method by adding LinkedIn to the process until you can justify spending a few hundred dollars each month on a reputation marketing system that will help you monitor, manage, build and market your online reputation, you will be building a stronger foundation that gives you room to grow.
Referral marketing when done using the method described in the article is one to one and its finite but an online reputation is one to many and it is indefinite. Both methods are referral marketing but the first method may only generate one to three new customers for your business.
Reputation marketing, on the other hand, has the potential to bring you many more customers over its life.
Visit http://yourreputationexposed.com/ to see what your current reputation is like online.
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