How much better would your business work if 30% of customers recommended your services to their friends? Are you using the potential of customers and connections gained to the fullest?
What are reference leads worth?
Compared to other lead sources, recommendations usually provide a shorter average sales cycle than leads from both inbound and outbound marketing. This is because people who recommend your business lend you some of their credibility. Conducting outbound sales, we not only have no information about the needs of our recipient, but we also have to develop trust, and this requires time — something entrepreneurs and their companies often don’t have.
In addition to the shorter average length of the sales cycle, recommendations are also characterized by a larger average conversion from leads to transactions. A very simple mechanism works here: if the solution works for a person we know who recommends us a company, we are much more willing to make a decision to buy.
Since we realize that we will sell faster and with a greater probability of success, let’s consider the cost of obtaining a recommendation. If we assume that companies are created to meet the needs of clients, the costs of recommendations are associated with satisfying… the needs of clients.
However, it is not that simple. We also need efficient customer service, appropriate complaint policy and many other elements of business that take place after the first transaction in after-sales service. All these factors can change our client into a raving fan who tells his friends about us — or a whimper who advises anyone he can against us.
Before you move on to the rest of this article, answer these simple questions: Do your customers recommend your business? How many recommendations have you received this month? Did you ask for a recommendation? Why aren’t you generating recommendations?
Customer service — good enough or special?
Let’s take a look at the basic aspect — customer service. Have you ever analyzed this process in your company? When was the last time you carried out a mystery shopper test? Did you introduce any improvements in this half-year after collecting feedback from the customers?
Clients recommend solutions when they receive the value for which they have paid. They do it when they feel particularly well looked after. It isn’t enough to do the bare minimum that is usually expected from a company. Excellent customer service must go a step further — it must deliver value beyond the basic offer.
Despite a competitive price and an overall good product, customers won’t recommend your company if they are neglected by customer service or treated in an instrumental way (e.g. employees of the company make contact only to push for the next transaction or in case of delayed payments).
Establishing and maintaining good customer relationships is extremely important and it should play a key role in your business. Stop wondering if your customer service is good enough, ask yourself if it is a strong enough feature to tell your friends about it.
Ask and you shall receive
“We lose 100% of the sales we don’t ask about” — this saying is attributed to Zig Ziglar, who has published many books on motivation and sales. Recalling these words, I would like to encourage a reflection on your attitude to sales. I believe that we cannot expect satisfactory results if we leave everything to chance. I’ve tested it many times — not only on myself, but also on clients cooperating with Casbeg.
How else to call a situation in which entrepreneurs don’t make changes to the sales process, customer service and generating recommendations, but expect changes (right and up, obviously) in the conversion rate or the number of generated leads.
That’s why I strongly encourage everyone, while conducting conversations — with potential clients, regular partners, between coffee and lunches, networking and conferences — to introduce into their sales pitch a few simple sentences like: “I saw that you know X, Y, Z”, “I recently worked with X, Y, Z which resembles Z, Y, X”, “could you introduce me to X, Y, Z?”, “you don’t know anyone who could use X, Y, Z, do you?”… Test that out on 10 people. Thank me later.
Generating recommendations actively
You must be aware that some people will treat your referral requests as a favor or extra profit for your business. Not everyone will like it, some people will not comply with your request or strongly refuse it. Even then you’ll be one step ahead, because you tried and collected feedback, which you will then implement (why collect feedback and change nothing?).
However, if your referral process is not easy and very time-consuming for the person giving the recommendation, it will have a negative impact on generating them. This way you can get rid of some good referrals despite the desire to generate them on the client side.
Even if you’re reluctant to ask for recommendations, which is a common occurrence and many of us go through it, it doesn’t justify the lack of action in this field. You just need a little more preparation, refining the process and working on yourself.
To this end, I suggest you try a small exercise. Choose the people with whom you have the best contact from the list of former and current clients. Out of them, select 5, who you are sure that your company has provided value to (that you can measure). Then grab the phone and just ask them how they are doing, how the company is developing, whether their daughter is still playing tennis and if they need help with something. If you still feel discomfort, make an appointment. It’s best to prepare for such a meeting by browsing at least your LinkedIn profile and choosing a few contacts you care about.
If you still don’t know how to ask for a recommendation, it may mean that you haven’t built a sufficiently strong relationship with your client, you haven’t provided enough value, you haven’t measured it or you have communication problems.
Consider your sales and customer service process, go back to step one and choose the “surefires” from the list. If you still have resistance, you don’t have any surefires, or you haven’t won your 5 clients yet, I know you made a mistake somewhere, so contact us and we will plan the whole process together.
If you have gained courage and met with a positive response, the key to generating recommendations is the ease of contacting your company. If someone recommends your solution, make sure that they can easily contact you or your representatives, leave their contact info or send you a message.
Recommendations are the basic driving force behind the development of many organizations. Although you shouldn’t rely on them a 100%, it is worth managing the process of acquiring recommendations in the same way as the process of sales or customer service. In sales, it only makes a mess on the desks of salespeople (and in CRM), therefore, being aware of this, use the full potential of the contacts gained to generate more and more sales thanks to your referrals.