Referrals can be one of the most effective client-building strategies for a small business. Learn how to start collecting them
For any small business, referrals matter. Building a solid reputation depends on the business’s ability to not only satisfy customers but also to get them to tell other people about their positive experience.
Data gathered by Invesp shows that leads brought by referrals convert 30 percent better than those from other marketing channels, and they have a 16 percent higher lifetime value. The data also shows that those customers who were referred are four times more likely to then refer their own friends and family to the business.
According to an Alignable survey of 7,500 small business owners, 85 percent of respondents said word-of-mouth referrals were the best way to acquire new customers.
When mapping out a business plan, it’s easy to see why referrals are an appealing way to get customers. Whatever motivates someone to start a business in the first place, chances are it was centered on connecting with clients and providing a need. Referrals offer those meaningful connections that true networks are centered around.
So how can an HOA vendor start getting referrals that will help build a sustainable, supportive network? Try these strategies to get started.
Look for referral networks within the industry
A professional referral network consists of organizations within the same or a related industry that refer clients to each other. One good example of a referral network is within the real estate business – mortgage brokers and real estate agents work together with referrals since they’re targeting the same audience but for different services.
Whatever type of business it is, it’s likely that management could grow the client base by getting referrals from other businesses within the industry. These networks are a triple win – for the vendor, the other business, and the customer.
These networks can be found by getting involved in industry events, such as conferences or trade shows, where professionals are even more likely to have their networking face on.
And remember, part of being in a good referral network is not just getting referrals but providing them yourself, which can boost your credibility.
Another effective strategy for building a network with referrals is to offer incentives that make it more likely for clients to tell their friends. For example, offer 20 percent off of a product or service to a client who refers to someone, as well as to the new customer they referred. Again, this is a triple-win situation, since they’re both saving money and the vendor is getting a new client.
Don’t be afraid to talk about your business socially
Social settings can be one of the most effective places for vendors to spread the word about what they do. However, they may worry about coming off as pushy or salesy to friends and family. But here’s why they should do it anyway: People who care about them will likely try to help when they hear that an acquaintance needs a service or product the vendor provides. And they also have their own network of people they can tell.
While it’s always a good idea to be humble about what you do, there’s nothing wrong with talking about it to try to get people talking about you.
Be memorable by being genuine
It can be a challenge to stand out in our digital culture, where a review can be read online within seconds of someone mentioning a business’s name. This is why it’s important to be genuine in any interactions and services – the modern customer depends on trust from the businesses they support.
When businesspeople make being genuine, open, and honest a priority in all of their interactions, they are likely to be remembered. This comes down to asking clients questions and listening to what they say. Make them feel heard, understood, and accepted. And make it clear how your services or products will address a need or desire they have.
Think about the businesses that have been most memorable to you. Was it their message or mission? Friendliness? Customer service? Think through your own experiences to come up with ways to make a lasting impact.
Building this kind of relationship with customers is worth the thought and effort because it is bound to get them talking about how great their experience was.
Referrals can account for a big chunk of a vendor’s business, so paying attention matters. Implement these strategies to build a referral network that will bring meaningful connections and help grow the business. To learn how our vendor management platform connects vendors with businesses and builds networks, get in touch with VendorSmart℠ today.