Few would disagree that the very best way to find a new customer, to build a business, is to have existing happy customers refer you to their networks.
Even anonymous referrals are better than nothing. How often have you looked up a service provider on social media, and looked at the ratings? Recognising they may be from friends, fools, and their mother, they are still a guide.
Happy customers will refer automatically.
Sadly this is not the case in a proactive sense. Happy customers may give you a wrap when they happen to be talking about whatever problem you solved for them with their friends and colleagues. That is not the same as proactively being an advocate for your product. You have to ask them to refer you, and the manner of asking is crucial.
Customers do not like referring.
In my experience, happy customers do like referring you, but as noted, they have to be asked. The psychological drive of reciprocity comes in here. When you have met and hopefully exceeded the expectations of a customer, they will feel obliged to at least be nice to you. Asking for a referral is a very easy way for them to be nice.
It is OK to pay for a referral.
No, it is not. Paying for a referral is almost an insult. Most people do not like to benefit personally from a referral where there is a friend or acquaintance involved, as it is their credibility at stake.
Potential customers do not believe in referred products.
Yes, they do. When someone who is trusted delivers a referral, that referral takes on an element of the trust that is in the relationship. Both parties know that trust will be damaged if a referral does not ‘pan out’ as promised, so they are careful. This is entirely different to the so called ‘influencer marketing’ that infests digital platforms. These influencers are no different to the talking heads we used to see all the time in ads in earlier times.
Assuming a referral will lead to a sale.
Many things must be aligned for a sale to eventuate, all a referral does is give you a credible foot in the door, the right to have that first conversation in the sales process. You still need to do the hard yards. You still need the sales process.
In a world where the first and must win commercial battle is for the attention of your potential customer, the presence of a credible referral is like getting a 20 metre start in a 100metre race.
