making referrals happen simonton version [compatibility mode]
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Making Referrals Happen!
Victoria Downing, Remodelers Advantage Inc.
Referrals and Growth
Primary Engines of Growth
Excellent customer service and referrals
Savvy businesspeople spend 43% of their time on customer service
Same people don’t invest in developing referral leads
You Need A Structured Referral Program!
From a Survey from SunTrust Bank
51% of new business growth comes from referrals
55% view word-of-mouth as the most effective marketing investment they can make
Over 9 times more effective
Not a Regular Part of Business
Fewer than 20% have a formal referral program in place
Only 6% think asking for referrals is an important part of generating referrals
40% of businesses don’t track or measure referrals at all
Fewer than 20% are building referral networks with influencers
Why Referral Leads? High Quality Leads
Third party testimonials
More effective tactic
Lower Cost/Higher Profits
Great return on the dollar
Easier sell
Less time needed
Leverages relationships you already have
More measurable
Why Referrals Don’t Happen
Here are just some of the reasons that referrals don’t happen:
You’re not committed!
You don’t ask for them!
You’re not sure your customers will give them if you do ask!
You’re asking the wrong way!
You don’t have a clear process in place!
Six Referral Building Strategies
Create a system to ask for referrals
Measure and track your best referral sources
Create formal customer referral programs and incentives
Communicate better with customers and influencers
Develop referral networks with local partners and centers of influence
Create positive reasons to reach out to customers
Create a system to ask for referrals
Only 6% make asking for referrals a priority!
94% forget or feel uncomfortable
Get over it!
Create a system to ask for referrals
Automatic part of your client contact When? How?
Ask for their help but let them know it’s OK to choose not to
participate
Let them know you want to help their referrals
Explain the process Describe customer you want
Be specific!
Measure and Track your Best Referral Sources
Create Advocates/Net Promoters
Net Promoter:
A loyal enthusiast who keeps buying from your company and urges friends to do the same
The Ultimate Question: Author: Fred Reichheld
Would you recommend our company to a friend?
Ranked 1 low-10 high
Three kinds of clients
Promoters 9-10
Passive 7-8
Detractors 6>
80% of referrals come from promoters
Companies with more promoters grow revenues and profits faster
Create Formal Referral Programs and Incentives
Need a clear process for how referrals are handled
Offer reward to referrer, referee or both
Include promoters in referral program
Testimonials
Marketing tools
Open houses
Trade show booths
Communicate Better With Customers
Share your vision!
Business owners typically tell fewer than 10 people that they want to grow!
Tell your Circle of Influence
Tell them how they can help
How many referrals you would like?
What does the perfect customer look like?
How will their referrals be taken care of?
How will they and their friends benefit from this?
Develop Referral Networks
Reach out to local partners and centers of influence Who reaches dozens of prospective customers?
Insurance Bankers
Real Estate Agents Accountants
Hairstylists Ministers
Car Dealers Who else?
Create Positive Reasons to Reach Out to Customers
Stay Top of Mind! Reach out to them 4-12 times each year
Numerous tactics can be used Catalyst Events
High profile events that people want to go to. Don’t be cheap. Find a way to invite the influencers* and high
quality prospects.
Influencer: Someone who knows everyone, who is involved in major charities, who can spread the word about you.
Building A Stream of Referrals: Fantastic Customer Service is a Must!
Guild Quality
Independent Customer Surveys
www.GuildQuality.com
Helps business owners measure levels of customer satisfaction in a variety of areas.
Building A Stream of Referrals: Fantastic Customer Service is a Must!
“I saw them around my neighborhood doing work, and I asked the people who worked with them if they would work with them again.”
“A friend referred them.”
“I heard about their work through my customers in the mortgage business.”
The Other Side of the Coin
“The job ran a lot longer than it was supposed to. I feel like they worked on it in their spare time.”
“There was a big discrepancy between the time they said it would take to do, and the time it took.”
“We had to repeat things three or four times. They made us feel like we were bothering them by following up.”
“When we needed something we had to call them over and over and wouldn't likely get a response.”
What We All Want To Hear
“This is my third time being with them – I wrote them a letter of appreciation every time. Their workers are outstanding, the management is outstanding, the quality of work is outstanding. Everyone says "yes sir“ and "no sir."
“It is not often in this kind of business that you can get a customer who is totally satisfied. They were here when they said they would be here, they finished on time.
“They are just a great run company and the owner is going to be a rich man.”
Putting the Service-Profit Chain to Work
by James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard A. Schlesinger
Harvard Business Review Publishing
The Service-Profit Chain1. Customer loyalty drives profitability and growth.
1. A 5% increase in customer loyalty can boost profits by 25-85%. Wow!
2. Customer satisfaction drives customer loyalty.
3. Value drives customer satisfaction.
4. Employee productivity drives value.
5. Employee loyalty drives productivity.
6. Employee satisfaction drives loyalty.
7. Internal quality drives employee satisfaction.
Where do you stand now?
To find out
Start with an audit – a survey of your current customers
Pay attention to areas of deficit
Pull your staff in to help you create systems to improve
Make Referrals Happen!
Be committed to building referrals
Create a system to attract them
Measure your results
Focus on customer service to build promoters of your business
Pay attention to how the service-profit chain affects your company
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