One of the best ways to get a premium is from customers who already know you deserve it. Referrals are one of the best ways to get new customers without heavy sales work and at a premium you fix. The customer is prepared to buy and already has a positive example from an existing client.
There are three types of referrals you can get from your customers:
- The customer’s neighbours
- The customer’s family and friends
- The customer’s professional networks (in a Company, Doctor network, etc.,).
At one point of time, I remember I was chasing a 5th degree referral network order from a customer in Hyderabad. The network effect kept going on and on. This is very powerful.
When should you approach the customer for a referral?
The best time is when the relationship is on a high and you have delivered on your promises. System commissioning is a good time. Even installation completion could be an appropriate time.
Definitely do not ask for a referral when you know that the customer is unhappy.
Many installers miss out on referrals due to poor project management or lack of good service after installation.
Fix that in your company. If you’re the company leader, discuss your customer’s experience from start to finish.
If you are doing less than 50 installations a month, you should talk to each one of them. Do not outsource this to anyone in the company. Listen, take notes and fix the things that are going wrong immediately.
Once you fix a customer’s problems, ask him/her for referrals and Google ratings immediately. This time is the high point in that customer’s journey. Make the best use of this opportunity.
How do you ask for a referral?
Use a variation of this line, as recommended by experts:
“Who else do you think will benefit from this?”
Do not ask if there is someone else, ask for who else. There is a subtle difference. Who else assumes that there is at least one person that the customer knows who will need this. You should be able to get at least one referral.
Of course, you can incentivise the customer to give out a referral. You could do this by giving the customer AND the person they are referring something of real value. For example, extra maintenance for 6 months or a discount on some services / upgrades to both the customers would be great. It’s important that the referral is also getting something as you don’t want this to become a pyramid scheme.
Tesla had a great program where both the referrer and referee got 1000 miles of free supercharging when the sale went through. A lot of SaaS softwares offer these one month free on a 12 months subscription for every successful referral. These are simple incentives that work.
If a customer is simply happy and not motivated by money, offer to donate the equal amount to a charity of their choice. That is an accepted practice too.
Go on, institutionalise this and grow your business.
Until next time, keep chasing greatness!
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