We have all heard that Referral Marketing represents one of the lowest cost and highest-leverage strategies on the planet. Why? The answer is simple. The cost to obtain a new customer from outside marketing is 500% to 1000% more expensive than a referral customer. Business owners can increase profits by 10% to 30% with an effective referral program.
But There is a BIG Problem
Unfortunately, this powerful business building strategy has been nearly put to death by many “business trainers” that touted its merits without teaching the HOW. As a result, business owners routinely make 15 common, totally avoidable, mistakes that keep them from having a continuous stream of high quality referral customers every month.
The Key is to “Activate” Your Customers
Most businesses do not have a formal referral system in place. Yes, they get referrals as a result of providing quality services and products but these are passive. Turn these passive referrals into active referrals and watch your referral business soar.
Passive referrals are those that happen by accident, that is, the customer refers someone to you without you doing anything to motivate this action. Now these are cool. After all, it feels great when a customer thinks that highly of you. But a passive process yields few referrals.
In contrast, an “Active Referral System™” gets your customer involved in, well, actively recommending you to their friends, associates and family members. An Active Referral System engages your customers in the process. In fact, ideally they will contact their friend on your behalf and sing your praises.
We teach a 90 minute workshop that helps members develop 5 Referral Systems. But for this week’s “Profit Tip” I want to share one key that will help you get more referrals now.
In order to get your customers “activated”, a few things must be in place:
You need to catch your customer in what I call a “Peak Referral State™”. That is, when they are ecstatically happy with your product or service.
The key here is to know when these peak times are. Make a list and begin to watch for them. Here are a few examples to help you get started.
On the day that your customers jump in their new pool the first time, they are sure to be in a peak referral state.
When a patient shares the fact they feel better than they have in years, they are in a peak referral state.
When a customer gets their first checks from the website you created for them, they surely will be in a peak referral state.
However, the peak state is not always when the service or product is delivered. Instead, it is when the benefit is delivered. For example:
When a back patient is first treated, they may actually feel worse for a while, it may be on the 5th or 10th or even 20th visit before they get the breakthrough, and yes, at that visit they are in a peak referral state.
When a customer purchases your nutritional supplements it may take 2-3 months before they feel the positive effects. It is therefore critical to determine this time frame in order to catch them in their “Peak Referral State™.” Sometimes the peak referral times are caused by outside forces.
When the stock market has a big loss day, that is a terrible time for a stock broker to ask his clients for a referral. However, it may be a great time for the stock broker that had his clients “shorting the market” (betting the market would drop) to ask for referrals of clients whose friends and families just got creamed.
It is critical that you learn to ask for the referrals at precisely the correct time. It takes a bit of work but it will increase your referrals significantly. And perhaps more important, it will end that horrible feeling of being embarrassed or feeling awkward when asking a client for a referral.
So this week, ask for a referral at the “Peak Referral State™” and see what happens.
Who know, it just may be contagious.
Apply this strategy and Profit NOW™.
To your success,
Scott Hallman
