According to a selling to small business survey, 83% of companies who target the SMB market generate sales through referrals. It was the most popular response and beat out the more traditional marketing forms such as direct mail, cold calling and trade shows.
The specific results were:
Referred customers are not only the most popular form of growing a business, they also tend to buy more, are more loyal, are less price sensitive, and have a shorter sales cycle. According to sales trainer Tom Hopkins, your closing ratio for non-qualified leads is 10% while it is 60% when you are referred to a lead.
Here is a list of what you can do to get more SMB referrals.
Have sales staff who have direct experience with SMBs.
Business owners love dealing with salespeople who understand them. Look to hire sales staff who have either run their own business before or have worked for a very small business in the past. They understand what it's like to be entrepreneurial and can relate to your customers directly. Lowes and Home Depot, for example, hire people who have been contractors in the past so that when contractors come into the store they are all speaking the same language.
Identify your champions.
Not all business owners will be great sources of referrals. The 80/20 rule applies to referral generation from your clients which means that 80% of your referrals will be generated by 20% of your customers. Look at who has given you referrals in the past or are likely candidates for being a solid referral partner. Thank them for their help, give them recognition and awards, provide them with behind the scenes access and treat them like an extended part of your family. By giving them the extra attention they will be even more motivated to help spread the word about your company.
Give your customers referrals
Small business owners are always looking for ways to grow their own companies. Stay on the look out for business opportunities for them. If you give your clients referrals to new business they will feel compelled to do the same for you. Remember that you are only one of many suppliers to the business owner and can rise to the top of their minds by providing additional help and support beyond what is expected of you. Give referrals and you shall receive.
Let them know
Many customers don't give you referrals because they don't know you are looking for them. You can plant the seed in your clients' minds that you are looking for additional business without being pushy. Let them know the type of customer you are looking for. The more specific you can be the better because it will help your clients narrow down to a list of potential candidates. Some will have immediate candidates for you while others will look for opportunities as they come up.
Provide excellent service
This seems like a no-brainer but very few people do actually provide excellent customer service. Small business owners are used to dealing with big companies who are unresponsive and offer terrible service. By being the one supplier who responds to calls and emails promptly, checks in to make sure everything is going smoothly, remembering important occasions, and taking the time to follow up, you will be the one company who gets talked about.
Get testimonials
If a customer gives you a compliment on an aspect of your business, ask if they would put it in writing and mind if you use it in your marketing materials. Positive testimonials from satisfied clients speak volumes and carry much more weight than messages from your company.
Consider a rewards program
Some of the more popular rewards programs including giving cash, gifts, and discounts. They are commonly used in the retail sector and in many service based business. Not all customers will use a rewards program because they don't want to feel like they are "selling" their friends, but many will take you up on your offer if the benefits tie nicely in with the business.
Look beyond your current customers
Referrals from current customers are usually the best sources but they are not your only option. Consider looking at past customers, partners, vendors, and other people who are somehow connected to your target market. Look at the other people your clients are buying from and develop strategic partnerships with them.
Evan Carmichael
The specific results were:
- 83%: Referrals
- 52%: Networking events
- 40%: Cold calling
- 34%: Direct mail
- 32%: Trade shows
- 23%: Boards and civic organizations
- 16%: Retail walk-ins
- 9%: Other
Referred customers are not only the most popular form of growing a business, they also tend to buy more, are more loyal, are less price sensitive, and have a shorter sales cycle. According to sales trainer Tom Hopkins, your closing ratio for non-qualified leads is 10% while it is 60% when you are referred to a lead.
Here is a list of what you can do to get more SMB referrals.
Have sales staff who have direct experience with SMBs.
Business owners love dealing with salespeople who understand them. Look to hire sales staff who have either run their own business before or have worked for a very small business in the past. They understand what it's like to be entrepreneurial and can relate to your customers directly. Lowes and Home Depot, for example, hire people who have been contractors in the past so that when contractors come into the store they are all speaking the same language.
Identify your champions.
Not all business owners will be great sources of referrals. The 80/20 rule applies to referral generation from your clients which means that 80% of your referrals will be generated by 20% of your customers. Look at who has given you referrals in the past or are likely candidates for being a solid referral partner. Thank them for their help, give them recognition and awards, provide them with behind the scenes access and treat them like an extended part of your family. By giving them the extra attention they will be even more motivated to help spread the word about your company.
Give your customers referrals
Small business owners are always looking for ways to grow their own companies. Stay on the look out for business opportunities for them. If you give your clients referrals to new business they will feel compelled to do the same for you. Remember that you are only one of many suppliers to the business owner and can rise to the top of their minds by providing additional help and support beyond what is expected of you. Give referrals and you shall receive.
Let them know
Many customers don't give you referrals because they don't know you are looking for them. You can plant the seed in your clients' minds that you are looking for additional business without being pushy. Let them know the type of customer you are looking for. The more specific you can be the better because it will help your clients narrow down to a list of potential candidates. Some will have immediate candidates for you while others will look for opportunities as they come up.
Provide excellent service
This seems like a no-brainer but very few people do actually provide excellent customer service. Small business owners are used to dealing with big companies who are unresponsive and offer terrible service. By being the one supplier who responds to calls and emails promptly, checks in to make sure everything is going smoothly, remembering important occasions, and taking the time to follow up, you will be the one company who gets talked about.
Get testimonials
If a customer gives you a compliment on an aspect of your business, ask if they would put it in writing and mind if you use it in your marketing materials. Positive testimonials from satisfied clients speak volumes and carry much more weight than messages from your company.
Consider a rewards program
Some of the more popular rewards programs including giving cash, gifts, and discounts. They are commonly used in the retail sector and in many service based business. Not all customers will use a rewards program because they don't want to feel like they are "selling" their friends, but many will take you up on your offer if the benefits tie nicely in with the business.
Look beyond your current customers
Referrals from current customers are usually the best sources but they are not your only option. Consider looking at past customers, partners, vendors, and other people who are somehow connected to your target market. Look at the other people your clients are buying from and develop strategic partnerships with them.
Evan Carmichael
Labels: cold calling, customer referrals, direct experience, direct mail, excellent service, generate referrals, networking events, referral partners, small business survey, support champions, trade shows
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