How Important Are Client Referrals And How It Can Boost Sales Productivity?
Updated: Apr 8, 2019
Customer referrals amount to one of the most vital sales leads for any companies. Customer referrals are the most cost-effective way of growing one’s business because it does not require expensive media advertisement and almost cost free. If your organisation can reach the ultra-high level of referrals, you have saved tonnes of advertising money for leads.
Customers who are happy with a business service will refer it to another customer to the said business. Thus the business would have already established a good amount of advance selling. Referred clients tend to trust your business more and tend to purchase more and also have lesser buyer regret or cancellation of services.
How to get Referrals?
1. Offer your clients referral fees or rewards. If the referral fees are rewarding and it’s not difficult to close each customer, you be surprised to find many of your clients are willing to refer you their friends. The biggest difficulty that businesses encounter in getting referrals is getting their marketing or sales persons to consistently ask for referrals. Remember that if you don’t consistently ask for referrals, you will not get enough of them.
2. Make sure you provide excellent service or products. This is one of the keys to be successful in getting referrals. The basic rule of the thumb is that you must provide good services in order for the customer to trust you with your friends. Customers are worried to lose their friendship because of your poor service thus they will take your quality of service very seriously in considering referring their friends to you.
3. Get customers testimonials and they will be open to referrals as they praise your services. You do not need a PhD to know that the best excuse you can use to ask for a referral is to ask for positive testimonials. Once your clients give you good testimonials they will also feel comfortable to give you referrals.
Why Customer Referrals Are Better? Every business knows that customer referrals are way better at garnering revenue than any other methods. The reasons why customer referrals are better are as follows:
1. Transferring Trust: The pioneer step related to buying process, is for the buyer to trust the business seller. It is a very difficult thing to establish the trust with an unfavourable lead. A referral lead is way better because the service was referred to them by trustworthy people. Therefore, this trust is transferred from the referral source to a said business.
2. Shorter Sales Cycle: Transferred trust shortens the sales cycle for a referral lead when compared to an unfavourable lead.
3. Lesser Price Sensitivity: The client referrals are less sensitive about price. This happens because of reduced risk in the minds of the referrals. Thus, they can focus more on the product or service value than on price.
4. Customised Offering: One can be more effective while presenting a product or service to a referred prospect. This is because one will generally have more background knowledge about them from the referrer.
Referred leads are the easiest to convert to sales. They are the most cost effective leads too. Build your referrals and you will save tonnes of advertisement monies and you will have less resistance when closing the sales.