Referrals: An Overlooked Marketing Strategy?
When was the last time you asked a valued customer or client to refer you to someone they know?
Many business owners sit back, and hope referrals will trickle in. They wait for that one happy client to “spread the word,” but don’t actively make it easy, attractive, or rewarding for clients to do so. It’s easy to forget, when waiting for referrals, that clients are busy. They may become inundated with work and simply forget to give you a referral.
Word-of-mouth isn’t just a “nice to have.” It could be a business growth engine, but only if you treat it like one. And it’s especially powerful in the business-to-business or service sector.
The Power of Referrals
Consider these statistics as a quick overview on the importance of referrals:
“84% of B2B buyers start the purchasing process with a referral, not with a salesperson.”
People are 90% more likely to trust and buy from a brand recommended by a friend.
91% of clients say they’d give a referral, but only 11% of salespeople ever ask for one.
Are you a part of that 11%?
How Referrals Can Outperform Cold Advertising
Trust:
Ads tell people how good you are. Referrals are someone trusted telling people for you. Prospective customers are far more likely to believe their friend than your Facebook ad copy.
Conversion rates:
Cold ads may bring clicks, but referred leads already trust you, because their friend trusts you. This means they’re much more likely to buy what you’re selling.
Cost:
Ads can quickly eat up your budget each day. Referral strategies, on the other hand, often cost very little to set up, yet the return can be significant.
Referral Strategies That Work
- Create a Formal Referral Programme
Don’t just say, “I’d appreciate a referral” and leave it at that. Make giving a referral really worth their while. You could offer incentives to clients who give referrals, like:
- Discounts on future services.
- Bonuses such as a free session or upgrade.
- Recognition, such as a public thank-you in your newsletter or a shout out on social media.
The key is clarity, let clients know exactly how your referral rewards programme works.
- Ask at the Right Time
Timing is everything when it comes to getting referrals. The best moment to ask for a referral is right after a client has had a positive experience with you, when they’re feeling most enthusiastic about the services rendered or product received.
For example:
- After completing a successful project.
- Immediately following a testimonial or review.
- During a check-in when they’re expressing gratitude.
A simple, structured question, “Do you know anyone else who might benefit from this?” can open many doors.
The Psychology of Referrals
Here’s the secret that many businesses forget: people don’t only refer because they want to help you. They refer because it makes them look good. When they recommend a great business, it reflects positively on their own judgment. They will also only ever offer a referral if they feel confident putting their name behind your business.
You’re trading on their reputation when it comes to receiving referrals. Keeping this in mind is essential.
Systemise to Maximise
Referrals don’t have to be random. When you systemise the process, they can become a predictable revenue channel.
Here’s how to do that:
Document the Process:
Decide when and how you’ll ask for referrals (e.g., after a milestone, in a project close-out email, in an after-service check in call, or during an annual review).
Automate Reminders:
Use your CRM or email software to send gentle prompts like: “If you know someone who could benefit from coaching, here’s how you can introduce us.”
Track Referrals:
Keep a simple spreadsheet or CRM record of who referred whom. This ensures you can follow up, thank them properly, and identify your best advocates, at which point you might consider offering them a token of your appreciation.
Reward Consistently:
Don’t come up with things on the fly, people talk. If Joe Soap, who referred four people, hears that Jane Doe, who referred one person, got a better reward there may be resentment. Create a standard reward structure, for example, every referral gets a £50 voucher, or a free upgrade. This way, clients know what to expect.
Create Assets:
Prepare referral request templates such as emails, social posts, or a shareable PDF that clients can easily pass along without too much effort on their part.
Quarterly Review:
Just as you review sales or marketing performance, review referral performance. Which clients referred the most people? Which partnerships worked? What can you improve?
Word of mouth is a fantastic way to make connections and propel your business forward. Could referrals be worth considering in your business, if you don’t already?
