Business Referrals Bakery Owner With Smiling Customer

5 proven ways to generate more business referrals

6 min read
John Jantsch

When you create an overall marketing strategy to grow your business, it’s important to have a variety of techniques and tactics in mind to help get the job done in today’s digital world. But one proven tactic that’s been used successfully for generations and is just as relevant today is business referrals.

Of course, your strategy will most likely include creating a website with high-quality, useful content and attractive design, paid advertising, a strong social media presence, and effective search engine optimization. But today, more than ever, you must build trust with your marketing.

And a referral comes packed with trust, which is why it is so important.

Related: How to use digital content marketing to grow awareness, trust and sales

Benefits of business referrals

Customer referrals hold a lot of weight when it comes to future sales, and for a good reason. People are always looking for social proof when it comes to buying decisions, which is why review sites and testimonials are so popular.

Whether you are looking for a new website, a full marketing plan, or a pair of shoes, it just feels easier to trust someone that has been there already.

It's no secret that people have no problem giving their opinions about a business. If people are referring their friends and family to you, they are essentially telling others you are worth the time and money, and your reputation will benefit as a result.

5 proven ways to generate more business referrals

Here are five ways to generate more referrals for your business:

  1. Offer incentives.
  2. Take action when you receive positive feedback.
  3. Provide multiple avenues to participate.
  4. Give before you receive.
  5. Make yourself referral-worthy.

Try one or more of these suggestions to convert happy customers into business referrals.

1. Offer incentives

Just because you have a wonderful product or service doesn’t automatically mean your customers are going to get out there and campaign on your behalf. Think of all the products and services you love to use. You might give a positive review when asked, but referrals aren’t the same thing.

With referrals, you want customers to let others know about their experience and recommend your products or services.

Sometimes it’s necessary to give people a little nudge — and what better way than to offer incentives for them to give a referral?

Many companies have referral programs and rewards programs that provide gift cards or free products for each successful referral. Brainstorm a few ideas for your business and then implement a program that rewards your loyal customers for bringing others into the fold.

Related: Is a customer rewards program right for your retail business?

Business Referrals Women Chatting

2. Take action when you receive positive feedback

Acting on customer feedback is an effective way to generate more business referrals. Most companies will make adjustments and modifications when they receive negative feedback, but take the time to ask for a referral when you receive positive feedback, too.

One way to get useful feedback is to create an online survey and send it to email subscribers or post it on your website and social media platforms.

Create a list of questions to ensure you are getting honest feedback and then take the time to analyze results.

You can also mention your referral program when you contact a customer about a positive review.

The point is to do something with the information you get and don't just let it go to waste. There is potentially a great deal of free advertising right at your fingertips, and all you have to do is ask.

Related: What to include in a customer survey — and how to get customers to participate

3. Provide multiple avenues to participate

Sometimes, you’ll get pushback when you actively seek out customer referrals, but that shouldn’t dissuade you.

If a customer wasn’t keen on providing a business referral, let some time go by and then approach the idea in a slightly different way. Next time, ask if they’d like to write a review or testimonial for your website or be included in a consumer case study.

Once you find out what they would be comfortable sharing, you can leverage the positive experience.

Different people have different tolerances and comfort levels when it comes to sharing information or their purchasing decisions, but most will respond to one of your efforts if you mix it up.

Related: 5 ways to encourage your customers to leave reviews

4. Give before you receive

Business Referrals Happy Hour

If you believe that positive words and vibes are like a boomerang and will always come back to you, then it makes sense to provide referrals to other products and services to the people you want to refer new customers to you.

If you send out an email to your subscribers and refer a non-competing company that may complement your own products and services, they will feel as though they can count on you, and the trust factor will skyrocket.

In turn, this will increase the likelihood of them referring customers to you.

As an example, if you run a marketing agency, you could refer businesses that sell office equipment, electronics and similar products that your customers would use. You can also pinpoint common problems your customer base has and then refer companies that will be able to help them solve those problems.

As long as it is adding value and doesn't conflict with your own offerings, then it should be effective.

Related: 10 local marketing ideas for connecting with customers in your city

5. Make yourself referral-worthy

By making your business exemplify the qualities and characteristics that would make people want to provide referrals, you will end up getting more business referrals. Some examples include:

  • Creating a strong list of core values and sticking to them.
  • Having a strong return program and satisfaction guarantee.
  • Doing great work consistently.
  • Giving more value to your customers than you receive.
  • Aligning with your customer’s values.

Just sit back and envision the type of company you'd love to refer new customers to, and then make sure you and your employees embody all of those qualities on a regular basis.

It all needs to be natural, but if you are genuine when it comes to wanting to help others and build valuable relationships with customers, then it shouldn't be overly challenging.

Boost your business referrals

It’s easy to understand why generating referrals is beneficial to your business. It’s also easy to see that you should take the actions listed above and find even more ways to generate referrals and leverage your existing customer base.

There are scores of potential new customers out there who have no idea you offer products and services that will make their lives better. One of the keys to reaching them lies in generating more business referrals.

Editor’s note: Give your business the attention it deserves with digital marketing tools that attract visitors and keep them coming back — from affordable and easy-to-use DIY tools like GoDaddy Email Marketing to expert services such as Managed Local Listings.

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