What is your best source of new business?
The first question we ask when we map a customer journey is “Where do you get your sales from?”.
The top answers are website and networking so far. But when we get further into the map we usually find a much larger opportunity – existing customers.
Research shows that you have a 15% to 20% of selling to a new lead. But, you have a 70% chance of selling to an existing customer or someone they have referred. Yet many businesses don’t have a clear strategy or process for asking for referrals.
Asking for referrals is an important part of the customer feedback process. When you ask a customer how they feel about your service or product, it’s a great time to ask for referrals.
By this we don’t mean questions like “can you give me the names and addresses of anyone you know who may need us”. We prefer “we’re glad you’re happy with our service. We’d love it if you would recommend us to anyone else you know!”
This “soft sell” approach does take longer to work. It deepens the customer relationship, adds loyalty and yields much better results long-term.
You can also consider rewarding referrals. We recommend trying 2 different ways to see what works best with your customers:
First, you could be upfront – “we value anyone who refers new customers to us. We’ll give you X for any referral you send who does business with us”. This appeals to some customers, and can give immediate results. It does incur cost though, and requires a process to make sure you keep your promise!
Second, you could ask for referrals but not mention a reward. This gives you the opportunity to create a WOW moment when you do get a referral. Your “thank you” needn’t cost you anything. Sometimes a phone call or public thank you has much more impact than money!
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