Referral Marketing | Renewable Referrals - FAQ's
(1) How is Referral Marketing better than advertising?
Advertise well, and your message will reach a ton of prospective customers who may or may not need your products and services right now. When they get closer to buying, they’ll need to go through the process of getting to know, like, and trust you before they become your new customer.
With Referral Marketing, if you’ve educated your referral partners correctly, they’ll hand-deliver ideal customers right to you. These clients will be a good match for you, have a problem you can solve, are eager to get that problem solved, and already know, like, and trust you because your referral partner does.
Think this might speed up your sales cycle a bit?
(2) How can I educate my clients and partners to give me quality referrals?
Cast a wide net, and you’ll spend a lot of time sorting fish. When your clients and partners know more about who is ideally suited for your products and services, you increase your likelihood of getting referrals who are a perfect match.
You don’t want to leave it up to your clients and referral partners to guess who’d be a good match. You’ll get better results if you take a more scientific and replicable approach.
The best way to educate your referral partners so they can send you top-notch referrals is to create formal documentation that outlines the types of problems you solve as well as a description of your ideal client. This way, your partners will know exactly who to send your way.
(3) Why haven’t my strategic partners been able to close any of the referrals I’ve given them?
You may end up feeling like that friend who tries matchmaking, only to meet with frustration as your friends sit home singing the blues about how lonely they are – but this is an easy problem to fix.
Usually the reason your referral partner isn’t closing the referrals you send is because you’re not sending people who match your partner’s idea of an ideal client. Even more likely, you may be sending your referral partner prospects who lack a critical characteristic: They must have a burning desire to have a problem solved… a problem your referral partner solves.
You can waste a lot of time and attention trying to build a referral program the hard way.
(4) Why do I need to spend time creating a process for this?
Your time is priceless – so it’s smart to invest it in profitable activities. Successful businesses run on systems. It’s no different with your Referral Marketing program. By building a formal system for nurturing and educating your referral partners, they’ll be better equipped to send more ideal customers your way, more often.
Practice makes perfect! Having a system in place ensures you have a plan to follow, so you don’t forget or skip important steps along the way.
(5) How do I ask for referrals without sounding desperate or too salesy?
Nothing feels worse than desperately begging for customers, except maybe feeling like a slick and slimy salesperson. The good news is, with an effective Referral Marketing program, you’ll never feel that way.
Referral marketing is built on a solid relationship, and at its core is the desire to help everyone involved: the customer, the referral partner, and yourself. When you know how to create a win for everyone, it feels good, not slimy or salesy. Everyone gets what they need, and nobody feels ‘sold’ this way.
Successful referral marketing requires a mindset that is committed to making the best-aligned matches between need and solution possible.
(6) How much should I offer as a referral fee?
A lot! Or, maybe not.
What makes an appropriate referral fee depends on several factors, including the value of a new customer to you, the nature of your relationship to the person who sent the referral your way, and sometimes even industry regulations that might make a monetary referral fee illegal or more hassle than it’s worth.
Sometimes, a financial reward is the best way to thank a referral partner. Other times, the more appropriate way to show your appreciation is with a non-monetary gift, and you can get pretty creative here if you know your referral partner well.
(7) Most of my business already comes from referrals. Why would I spend dedicated time on this if it’s already working?
Success in business comes with creating and refining proven systems for getting the results you want. When you invest the time and attention to fine-tune your Referral Marketing system, you’ll find that incremental improvements yield exponentially better results.
By improving your referral marketing system, you’ll get more of the great results you’re already enjoying: the opportunity to speed up your sales cycle by borrowing the trust and credibility of your referral partners as they deliver almost-closed business right to you.
If you’ve got the basics of a referral marketing program working for you right now, you may be surprised how easy it is to make some improvements to the system so you get even more referrals.
(8) How long will it take me to get referrals?
How quickly referrals start appearing depends on how you answer two primary questions. First, how much effort will you put into developing relationships with your referral partners so they know how to spot your ideal customers and trust you enough to send them your way. And second, what kind of access do your referral partners have to your ideal clients?
You’ll find that the more time and effort you spend building and implementing a formal referral partner program, the sooner you’ll enjoy the benefits of having more ideal customers buying from you.
(9) How frequently do I need to communicate with my referral partners?
The most successful referral partner relationships are built on trust, which requires getting to know each other, learning how to recognize one another’s ideal customers, and then being on the lookout for prospects to send to each other.
Of course, this will only work if you both remember to remember each other. Staying top of mind takes creativity and the commitment to nurture the relationship. You can do this easily and naturally by connecting face-to-face, by phone, mail, email, and social media whenever you’ve got the opportunity.
(10) How do I assess whether or not someone would be a good referral partner for me?
Take a close look at what their ideal client is like, and you’ll be on the right track for finding out. Are your products and services complementary? Do you understand what they do? The problems they solve?
Take a look at their network. Does it include your ideal client? You may be onto a good match.
Next, take a closer look at how you both do business, how well you communicate, how much you trust one another. If all of these elements seem to be a good match, you may have found an ideal referral partner.