This illustrates that people aren't shy when it comes to talking about their experiences with companies, which might leave you wondering what you can do to sway these conversations in your company's favor.
In an effort to capitalize on the undeniable power of word-of-mouth, many companies are turning to customer referral techniques as a means of increasing customer sharing. This allows them to connect with more qualified prospective customers. These referrals trust the person they already know more than they'll ever trust your advertising, and they'll be cheaper for your company to acquire.
If you're looking for some tips on how to break into this space, we've put together a list of how to get referrals.
How to Get Referrals from Customers
Look for opportunities for a positive response
Provide a template
Act on positive feedback
Distribute your content and resources
Create different avenues for advocacy
Add a customer loyalty program
Align with your customers' values
Adopt a customer referral program
Refer other companies
1. Leverage LinkedIn.
Rather than asking for referrals blindly, you can improve your odds of success by doing your homework first.
When you approach a customer with a name or company that you'd like to connect with, you're eliminating the need for them to sit down and think about it for you. Lucky for you, LinkedIn's Advanced People Search feature makes it's easy to turn up qualified second-degree connections that your customers can introduce you to.
To get started, click the search bar at the top of the page, and then select 'People' from the drop-down menu. From there, you can filter your search by second-degree connections as well as additional specifics like industry, title, keywords, and location to turn up a list of potential referral opportunities. This will help you find an ideal referral candidate to bring up to your customer.
2. Look for opportunities for a positive response.
The best referrals come about after the customer has had an opportunity to experience the value that you're capable of delivering.
You wouldn't ask your boss for a raise right after you missed the mark on your monthly metrics, which is precisely why it wouldn't be appropriate (or effective) to request a referral when you're under-delivering on what you promised a customer.
To set yourself up for success, keeping your customers up-to-date on the outcomes they achieve using your product or service will make them happy -- and they'll want to spread the word about you. This starts with a successful onboarding process so customers have a clear sense of expectations, timeline, and work required to get to that point.
Then, consider pairing referral requests with positive customer experiences.
If you just delivered the news that your product or service helped them increase monthly revenue, ask away.
But, if you came up short on all of the KPIs you defined together for the quarter? Pump the brakes on that request.
3. Provide a template.
When asking for referrals, it's important that you're mindful of how busy your clients are (that's why they hired you in the first place, right?).
Rather than ask and hope that they find the time to follow through, be more proactive in your approach by eliminating some of the heavy lifting for them.
I don't know if I've mentioned it before, but I've been working with [Your Name] for a few months. The other day, I was talking with him about some of the things that he and I have done, and I realized that I should put you two together. So ...
[Referral], meet [Your Name, with a LinkedIn profile URL].
[Your Name], meet [Referral, with a LinkedIn profile URL].
Can I leave the rest to you guys?
Talk to you both later.
If you get any pushback from your customer on sending it out, don't push them on it again.
4. Act on positive feedback.
In order to accumulate more referrals, you have to prove yourself as referral-worthy.
To ensure that you're meeting (and exceeding) the needs and expectations of your existing customers, it's important that you're regularly collecting and acting on their feedback.
SurveyMonkey is an online survey software that makes it easy to whip up and distribute client satisfaction surveys to keep tabs on what you're doing right (and where you need to improve).
(Additionally, HubSpot is releasing customer feedback tools as part of our newest product line -- sign up to try it now.)
Before you send off a survey, you want to be sure that you're positioning it in a way that is going to surface the most honest and accurate results. Make sure you're writing effective survey questions and choosing the survey types that will best suit your needs.
5. Distribute your content and resources.
According to Google's Zero Moment of Truth study, the average buyer now engages with more than 10 pieces of content before making a purchasing decision. This means that before your existing leads closed into customers, they weren't being shy about eating up all of those resources you've worked hard to put out.
This places a profound emphasis on the importance of strategically distributing that content to ensure that it lands in the hands of qualified prospects. And considering your potential customers are already consuming your goods, adding an easy referral 'Share This With a Friend' link to your automated offer emails or on your thank you pages could help you achieve just that.
Making it easy for your customers to pass along your resources to their qualified connections before they even close will help you stay one step ahead of the game at all times.
6. Create different avenues for advocacy.
If you get pushback when you ask for customer referrals, the first step is to back off and give them space. It's not important that you know the exact reason why they're saying no, and you want to be respectful of your relationship.
But once more time has gone by, consider reaching out to them with a different offer to advocate for your company without having to actually refer someone: by writing a review, serving as a case study, or submitting a testimonial.
These lower-effort actions by your customer will still drive potential new leads to your company -- and won't risk your relationship with your customer. Ask them what they would be comfortable sharing, and see if you can find a place for their positive feedback on your website or social channels.
7. Add a customer loyalty program.
Your most loyal customers are probably going to be the ones who refer your company the most. Acknowledge these groups by creating a customer loyalty program that rewards them for advocating on your business' behalf.
This system could be point-based, or it could even be a premium membership. It could also extend beyond just customer referrals as well. No matter how you do it, make sure your customers feel valued and they'll be more inclined to help you.
8. Align with your customers' values.
Do your research to learn about what your customers truly value before asking them for a referral. Then, you can align your incentive or acknowledgment with those values, and you'll be able to give them an idea of the impact they'll have with a referral.
For example, if your customers use your product for nonprofit fundraising, or if you know they're personally or professionally invested in advocacy for a cause, you could reward them for referrals with a donation in their name. Simple gestures like this can go a long way toward proving to customers that your relationship is a partnership, not just a business transaction.
9. Exceed expectations.
Word of mouth is one of the most powerful ways to propel referrals for your company. However, it's largely dependent on loyalty, which means that this is something you really have to earn.
If you want to get your customers (or potential customers) raving about your service, you have to delight them.
Go above and beyond for your customers not just by achieving goals with them, but by sharing their content on social media, citing them in your blog content, and proving to be an indispensable resource for them. Then, the case will be made for you why they should tell their network about the great work you do.
10. Adopt a customer referral program.
Adopting a customer referral program is a great way for your team to be proactive when acquiring new referrals. HubSpot blogger, Madeleine LaPlante-Dube, describes in a post that having one shows, "that you're confident enough in your services and team to know that a referral program would be a positive investment."
Your customers will notice this confidence and feel more comfortable with sharing information because you have an organized system in place. Customer referral programs improve the credibility of your business making it easier for customers to trust you.
11. Refer other companies.
If you're asking a customer to refer people to your business, they may expect the same from you. By offering to refer your customers to other companies, you'll bring valuable bargaining chips to the negotiation table. Your customers will feel like they're getting equal compensation for the information they give up.
But, be careful. Your relationship with your current customers is at stake whenever you refer them elsewhere. Make sure you're sending them to a company as great as yours or they may end up blaming you for their misfortune.
12. Offer incentives.
Nobody likes to work for free, right?
If you want to sweeten the deal and make sure your customers actually scour their networks for a good referral, offer them something valuable in return. Whether it's a Starbucks or Amazon gift card, a free month's subscription, or cold hard cash, give something back to your customers for connecting you with warm leads -- they deserve it.
One way to organize these incentive offers is to set up a program that oversees customer referral agreements. Referral agreements can help your business continuously generate substantial amounts of new leads by creating a system that rewards influential customers.
What is a referral agreement?
A referral agreement is a contract between a company and an external party. The business agrees to reward the other party in exchange for the successful referral of new leads. Both parties agree on mutual terms for compensation then sign a referral agreement to solidify the deal. This creates an ongoing relationship that benefits both the company and their new partner.
What should a referral agreement include?
When drafting a referral agreement, you'll want to include the following items in your template:
A header that includes the name of the business and the party involved as well as the date of the agreement. Standard legal stuff.
The relationship between the business and the party. This details that the business is the principal holder of equity, while the party is the external agent.
The qualifications for a new lead. Do they have to convert to customers? Or, can they be potential leads? Customers are not always guaranteed from referral so it's important to establish what makes a referable lead.
How the external party will be compensated for their efforts. This can be a fixed payment per lead or it could be based on the lead's quality. In some cases, the external party may not be rewarded until the lead converts.
If there is a payout period or not. If the referral has to convert before payment is issued, be sure to specify how much time will be allotted for the lead to become a customer. If the lead converts during that time, then the external party is compensated for the conversion.
Will the external party be paid for recurring conversions? If a referred customer makes another purchase, you'll need to determine whether the external party will be rewarded. This way you could incentivize your partner to deliver higher quality leads that make multiple purchases.
Whether the agreement is exclusive or not. If you don't want your customers making the same deals with competitors, make sure you clarify that in the agreement.
A confidentiality or privacy statement. This restricts either party from oversharing any sensitive information during the agreement. It also can protect against any intellectual property theft that could potentially occur during exchanges.
When should you use a referral agreement?
While a Starbucks gift card reward probably doesn't warrant a referral agreement, you'll want to keep this template handy when you're dealing with larger customer accounts. Customer referral agreements typically are only used in dealings where significant amounts of money are being exchanged between parties. Having a referral agreement provides security for both sides and ensures the relationship is mutually profitable.