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How to create great referral strategies & customer loyalty

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It’s one of the most cost-effective ways to gain new customers, but so many of us don’t do it.  Asking for a referral should be a simple question, and with 80% of work of a well-established business coming from repeat business, referrals, or word of mouth, it should become best practice of any organisation.   

It’s paramount that you should be customer focused and deliver on expectations.  In my book, The Quiet Sales Genius, I summarise and comment on eight keys to gaining referral for your business as described by Brad Sugars in his book Instant Referrals, and I’ve highlighted them here so you can become more proactive in promoting referral-based business.

  1. Establish who your ideal client is.Also, think who your “A class” ideal client is, this would be someone you’d love to deal with, e.g. they are fun, pay on time and are genuinely a good customer to deal with.  This part of establishing your referral strategy is important because if you know who your ideal client is, it will be a lot easier to find and attract them.


  1. Establish how much each client spends with you each year on average.  This will help you to calculate how much you can afford to invest with each client in order that you can encourage them to help refer people to your business.  For example, if a customer spends $500 a year with you and your profit from these transactions is $300, then could you invest say $50 of that profit each year to reward your client?  While this will reduce your profit, you could view the $50 as a marketing investment and Consequently, two things might happen: Firstly, your original customer may stay with your business longer.  If they currently stay four years on average, then your generous $50 contribution to them may see them stay one more year.  Secondly, their loyalty to your business will certainly be growing each year that they stay with you and will almost certainly increase their desire to refer you to their friends and other business acquaintances.


  1. Always keep in touch with your clients.  A general principle of marketing is that you should give something to your customers every 90 days – that’s just four times a year.  Contact could be by way of phone call, text message or email.  Ensure you’re providing something of value with each contact and make sure it’s not just a “hello” call.


  1. Develop an “awesome customer service” strategy and culture within your business.Think about how you and your team will deliver this memorable customer service.  Make sure everyone is on board and understands the importance of it.  This is the kind of service that gets people talking about your business and referring you.  It doesn’t have to be big gestures; it’s often the little things that add up to big things, so make an effort and provide that ‘personal’ touch each time you’re speaking with your customers.   


  1. Establishing a very high standard of customer service will make asking for a referral easier.  
    1. Your team will feel more comfortable asking.
    2. In some instances, you might make the giving of referrals a condition of working with you.  
    3. Have a rewards program in place for receiving referrals and well qualified leads, whether that’s a month’s free subscription or similar depending on your business.


  1. Establish a system of rewards for your clients.  This could be based around special occasions such as their birthday or client/work anniversary.


  1. Establish a referral card.  The card has your details on it and has a space for your client to write their name as well as the name of the person they are referring.  The advantage of a card is that your best customers have something tangible to give to people they are referring to you.


  1. Hold an event.Holding an event such as an “invite only” evening creates an element of exclusivity.  This is a great way to invite customers and acquaintances of theirs and a means to launch a new product or service, provide business tips etc, and overall is a great opportunity for everyone to network, so there’s a benefit to all those people attending and not just you as the host.   

Having a system in place to ask for referrals should be part of any business strategy, however, it’s the actual asking that counts and some people can be shy or embarrassed to do so.  Having a few simple systems in place can make the asking of referrals much easier.  By asking on a more regular basis, it’ll become much more natural and part of your everyday conversations with customers.  You may be surprised at the results!  People like to help others, so start asking for referrals today.

If you’d like more information on referrals and other business tips, you can purchase The Quiet Sales Genius available for $25 to include shipping within New Zealand or just email markdaniels@actioncoach.com for your FREE PDF copy.  




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