Most small business owners know their single best source of new business is likely to come through satisfied customers or established business contacts. Yet despite the fact that referrals can be worth their weight in gold, only a relatively few savvy business owners go to the trouble of putting processes in place to ensure a constant stream of referral traffic. Following are seven strategies you can implement right away to draw prospects who are serious about buying your products and services:
1. Eliminate the Guess Work by Asking for Referrals
Just as you didn’t dream your way into launching a business, you can’t wish your way to sales growth. There’s nothing magical about getting a referral, but you can’t be shy about asking. Most business owners understand the value of referrals and, more often than not, they enjoy helping their fellow entrepreneurs. Start by asking friends and acquaintances; once you have your pitch down, expand to current clients and business contacts. Keep a formal pitch handy, in case they ask you to send them something they can pass along to others.
2. Make Sure People Understand What You Do
It may seem obvious, but often we assume people know what we do because we’ve shared a business card or referenced a recent project we worked on. But do they understand the depth or scope of your professional focus? Highly unlikely. In most cases, people—even close friends and family members—would struggle to say what it is, exactly, that you do. So, make it easy for them. Rather than boring them to death with the minutiae of your day-to-day activities, prepare a one-sentence response that includes a sense of your ideal client—because it’s no so much what you do that sticks in people’s memories, it’s who you help. An IP lawyer, for example, will draw more referrals from social contacts by saying something like, “I help technology startups patent and protect their intellectual property” than if she launches into an in-depth explanation of a current legal challenge. Keep it simple to make it memorable.
3. Cross-Promote to Other Industries
Another no-brainer often overlooked by entrepreneurs who are eager to grow their businesses is the value of networking with professionals in complementary fields. While it’s great to network with members of our own tribe for ideas on how to handle challenges that are specific to our niche industries, it’s rare for competitors to refer clients to one another. When they do, they’re usually unloading problem clients, or unappealing overflow work. A far more rewarding approach is to target companies that are similar but different. In other words, companies that sell into the same space you do, but don’t compete with your offerings. For example, the owner of an office furniture company might benefit from exchanging referrals with a phone system vendor. Or, a graphic designer might swap referrals with printing companies.
4. Get Personal
Sometimes the best new business comes from an old school approach: face-to-face interaction. Organizations like your local Chamber of Commerce, the Rotary Club, Toastmasters, and others aimed at empowering entrepreneurs remain a solid choice for generating referral business. Most of these groups sponsor live events and networking groups that are specifically designed to foster referral traffic. Best of all, you’re not just promoting yourself to fellow business owners; they’re promoting you to their contacts with the hope you’ll reciprocate. Approached strategically, face-to-face meetings can be a fantastic source of new business.
5. Tap into Social Media
Hands down, LinkedIn is the King Kong of B2B networking. With well over 100 million users and five million daily visitors, LinkedIn was designed specifically to encourage connections for the purpose of doing business. Whether connecting with someone new, or an old acquaintance, the platform offers a powerful tool for triggering referrals. If you invest the effort to learn the system’s best practices (it’s not rocket science), it’s almost difficult not to grow your business. Facebook and Twitter also offer solid tools for establishing business contacts. Just be mindful of the amount of time you devote to social media, and remember it’s not a replacement for making face-to-face contacts.
6. Give Before Taking
Savvy marketers know the power of reciprocity. You should, too. In a nutshell, humans are wired in such a way that, when we receive a gift, we naturally want to reciprocate—and we usually want to do it quickly. The same applies to business owners. So, why not reach out today? Offer one of your contacts a strong referral. In all likelihood, you’ll receive one of equal or better value within a few days. No one, especially business owners, likes to feel indebted. If you reveal yourself as someone who looks out for your friends, you’ll always have lots of friends—and friends help one another.
7. Small Jobs Can Lead to Big Referrals
When first starting out, small businesses are fueled by dreams and caffeine. The temptation is to focus on landing a big account right away. More often than not, however, these big accounts have established relationships with competing vendors, or they simply won’t “gamble” on a newcomer. Rather than maintaining an all-or-nothing approach—and wasting precious time—consider targeting a referral source who has a history with, or contact inside, that dream client’s organization. Landing just one small assignment will give you the opportunity to prove your value, and make it much easier to pitch larger, more rewarding projects.
Implementing any one of these proven strategies will help grow your business. Adding all seven to your arsenal will catapult you to the next level of business success.