Do you have happy customers? They can be one of the most effective ways to tell others about your business. Online review sites try to capitalize on the value of referrals, but whether it’s a new restaurant, a realtor or a movie release, there’s nothing quite as powerful as a personal recommendation from someone whose opinion you trust.
Entrepreneur and Shark Tank judge Barbara Corcoran had this advice for a real estate agent just starting out: “All the best leads in every business come through referrals, because the customer is already prejudiced toward you and expecting great results because they were recommended by another satisfied customer. So the most successful method of prospecting new leads is getting your last customer to recommend you.”
Over the 35-plus years of my career, I’ve learned that Barbara’s advice hits the nail on the head. While this is good news for many businesses, building a successful referral-based marketing approach requires that you do everything you can to ensure you have happy customers. In other words, if you’re encouraging your customers to tell others about you, you’d better make sure they have good things to say.
Here are four things to consider if you’re trying to build a strong referral-based marketing plan for your business:
- Understand your brand. Saying that, I don’t mean what most people associate with their “brand.” Early in my career I had a mentor that drilled into me, “Your brand is not your colors, your logo, or what you say about yourself. Your brand is your values and how you act on those values with both your customers and your employees.”
I believe this is invaluable insight, and critical to making referrals come easily and naturally. For example, if you claim that you put customers first, you demonstrate that when there are problems or when things don’t go exactly as planned. Customers appreciate businesses that happily fix mistakes or take responsibility when things go wrong. That’s not only the way to build repeat customers, it’s the way to encourage customers to say good things about you and refer their friends because they trust that you will take care of them. In other words, you can’t just talk the talk; you need to walk the walk.
- Happy employees = happy customers. This is closely related to understanding your brand. How your employees treat your customers is a direct reflection of how you treat your employees. Remember, your brand is a reflection of how you treat your customers and your employees.
When your employees are empowered to do everything in their power to help satisfy customer needs (and know you will back them up), they will make sure your customers leave feeling like they’ve been treated fairly and will be happy to tell their friends about you. While it’s true, some of your employees might not make the same decisions you make in the heat of battle, they need to know you will back them up—or they will avoid going the extra mile for a customer come crunch time.
- Nobody is perfect—and you don’t have to be either. Most people understand that mistakes happen in the course of doing business. With the exception of a few hard-to-please customers (who you will likely never make completely happy), most of the people you do business with every day don’t expect perfection. What they do expect is that you will always do your best to make sure your product or service performs as advertised and will fit their needs.
- Don’t be afraid to ask. It’s human nature to want to be helpful. Don’t be afraid to ask your customers to help your business grow by telling their friends about what you’re doing. You may be surprised at how many will comply and tell all of their friends about you. A lot of businesses offer discounts to their customers who refer their friends. One of our realtor friends will often send my wife a thank-you card and a gift certificate to dinner at her favorite restaurant when he sells a house to one of her acquaintances. She doesn’t do it for the gift certificate, but rather because she likes him and is confident he’ll do everything he can to help her friends. The card and night out simply tells her how much he appreciates the referral.
As Barbara says, “All the best leads in every business come from referrals.” Encourage your customers to become your best brand advocates by giving them something good to talk about.
Ty Kiisel is a contributing author focusing on small business financing at OnDeck, a technology company solving small business’s biggest challenge: access to capital. With over 25 years of experience in the trenches of small business, Ty shares personal experiences and valuable tips to help small business owners become more financially responsible. OnDeck can also be found on Facebook and Twitter.