A few statistics to shock you into reading further:

  1. According to the “New York Times” 65% of new business sales comes from some type of referral.
  2. “Nielson Surveys” suggest decision makers are 4 times more likely to buy if the business source is from a referral.
  3. “The Journal of Marketing” says a referred customer has 16% higher lifetime value.

After reviewing these facts I started thinking about the Opportunity Inc. client base and many of their histories of success. Although not statistically validated I would have to say – “it is all true!”

I teach a marketing seminar to entrepreneurs monthly. Although I pound the value of referrals in the presentation, I plan to modify if for more emphasis going forward. Since I like lists here are the 6 things everyone must consider to get the referral engine primed.

  1. WHO – Most entities begin their marketing planning with target segment identification. In the case of referral program development ask your team two questions: a) What other businesses sell to or have customers who are in the exact segment we are targeting? And b) Which of our customers love our product/service who would be willing to refer us?
  2. ASK – Every sales seminar reminds everyone to “ask for the business” the same premise applies to referrals. If you do not ask for referrals do not expect to get any!
  3. TOOLS – The Opportunity Inc. client base uses every marketing tactic conceivable: Web and SEO investment, Direct Mail, Telemarketing, Video, Sell Sheets/Brochures. Now consider what tools you can supply your referral sources to make it easier for them to refer you. In today’s digital world a forwarded link is magic and leads to a pot of gold. It is also important that your tool box has a methodology to track referrals.
  4. GIVE & GET – Don’t ask for referrals unless you are willing to give referrals. The best way to get the ball rolling is to offer a referral to your future source.
  5. REWARD – There is nothing wrong with rewarding referrals. It can be as simple as a thank you lunch or as formal a cross referral alliance agreement offering a percent of revenue. Match the reward to the person/entity. Different things motivate behavior.
  6. THANK YOU – In today’s fast paced world is sometimes important to remind ourselves of the obvious and the historic basics. When someone offers you a referral demonstrate diligence in following up professionally and with same diligence and urgency say THANK YOU!

If your 2015 marketing plan does not have a focused program on referral generation you may want to revisit the thinking!