At Mischievous Marketing, one of the questions we get all the time is ‘how do I generate customer referrals?’ It’s an attractive prospect – customers expanding your business for you? It’s like two birds, one stone, right? That said, it’s not always as simple as it may seem.
An article by Littlechild (2010) suggests that 58% of clients made referrals because they felt their adviser had done a good job and wanted to return the favour. A further 38% made a recommendation as they had a friend they knew was in financial need. But how can these referrals be boosted in practice?
Here are 3 ways to generate customer referrals in your business.
1. Give them reason to talk about you
As much as some clients may rely on you for all their financial services, you’re probably not the first topic of conversation when they meet up with their friends, family and colleagues. Although they may already trust you with a lot of their personal information, it’s a big leap to let them in to your personal life through a recommendation to someone they trust and respect.
Our research shows that referrals are essential based on two things: right time and right place. Right time is pretty obvious – the potential new client has to be in a position to need one of your services. For example, planning retirement or considering investment. Right place is a little more abstract. It refers to the source of the referral – the strength of the referral is based on their credibility, not that of your company. So if the referee doesn’t respect the referrer, that’s what we would call the wrong place. Admittedly, that’s a little out of your control.
So, how do you make sure your business and services are at least popping up at the right time? An ongoing level of communication is a good start. Staying in regular contact with your clients will increase the likelihood of your name bubbling to the surface if their friend or colleague mentions retirement plans, or a family member brings up their inheritance planning.
Another potential way of ensuring your business is making timely appearances is through referral programs. Many businesses have seen success with these strategies, however we would urge caution. For financial advisers, there are a number of potential pitfalls when it comes to compliance and ethical issues – for you and your clients! Some may feel demotivated by gaining from referrals, which ideally should be built on trust, credibility and respect.
That said, a referral program that promotes the ideals of trust and partnership might not be a bad idea. If the ‘reward’ was something they both could share in – for example, dinner for two or a couple of free cinema tickets – it would help emphasise and reiterate those ideals of trust (and possibly even overcome that ‘right place’ headache).
If this option isn’t for you, it’s still important to be grateful for every single referral you get. This is especially true if you’re not offering an incentive upfront. Your customer has taken it upon them self to recommend you to a friend, colleague or member of their family. That’s a very personal thing and the individual is putting themselves at risk by doing this.
If you’re not into providing them with bonuses and gifts, it would still be courteous to thank them personally, either with a letter or card. Although your original customer still hasn’t personally benefited from the referral, it’s possible they would really appreciate the gesture. This would make them more likely to recommend you again in future.
2. Don’t be referable – be REMARKABLE!
Go above and beyond for every customer. If you outdo their expectations, it surprises them – shocks them even. It’s the WOW factor that makes a customer go from ‘sorry, I’m late – had a meeting with my financial adviser’ to ‘I just had the best meeting – let me tell you all about it’!
Naturally this isn’t easy – if it was, everyone would be doing it. The key here is to look at three factors: what does your customer want, what do they expect and what do they get? It’s worth noting that what a customer wants and what they expect can be very different things. For example, I always want the England National football team to win. But what I expect is a lingering disappointment.
To get a better understanding of your customers, try reading our blog on customer satisfaction.
Not all customers will recommend you to friends and family, but that doesn’t mean they wouldn’t recommend you to anyone. In some cases, customers and clients might just not know anyone else who would benefit from your products and services. In these cases, it might be worth asking if they would be willing to provide a testimonial.
These third party sources are a credible way of promoting your company to other potential customers, and can be used either in brochures or on your website. Business clients may also be willing to provide personal recommendations via LinkedIn, which can be really helpful in boosting your all important personal profile.
But remember, LinkedIn isn’t the only social media platform out there. Despite it being ideal for making more business connections, it doesn’t necessarily reach the friends and family of your customers. If you’re providing services that can benefit the whole family unit, you’ll need to be on a platform that reaches them.
Although Facebook membership is thought to be decreasing amongst the youth of today, it is seeing some growth in more mature generations: uncles, aunts, that weird cousin – even some grandparents! In the same way people might leave recommendations on your LinkedIn page, you can ask them to leave reviews on your business Facebook page.