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9. Win Big with a Referral Program

Win Big with a Referral Program

When it comes to winning new sales, few things are as persuasive as this:

The recommendations of your already satisfied customers.

In fact, 92% of consumers report trusting referrals from friends and family over any other form of advertising. And 82% of Americans say they seek out recommendations from family and friends before considering a purchase.

With statistics like that, having an official referral system simply cannot be overlooked—unless of course you’re OK with missing out on a massively influential platform for growing your company’s sales.

The Greatest Salesman in the World

The power of referrals is something the greatest salesman of all time intuitively understood. With this knowledge—and leveraging what he called the “Law of 250”—this gentleman sold more cars than anyone in the world for 12 years straight.

This fellow’s name was Joe Girard, and between the years 1963 and 1978, he sold 13,001 cars from a Chevy dealership in Eastpointe, Michigan. Not only that, but he was also recognized by the Guinness Book of World Records for having sold the most cars in a single year: 1,425 in 1973.

The Secret to Joe’s Success

Joe took a simple approach to sales. He focused on building relationships.

Through a series of varying life circumstances, he came to the conclusion that each person has about 250 people in their close network—the kinds of friends, family and acquaintances that would attend their funeral or wedding. 

To Joe, that meant every customer brought with them the potential of 250 more friends or enemies—folks that would either be willing to do business with him or not depending on their car-buying experience.

Knowing this, Joe made a few rules to make the most of each relationship while harnessing the power of their existing network.

  • A few weeks after a sale, Joe would call each customer and ask how things were going. If all was well, he’d ask for a referral. If there was some problem, he would fix the issue and then ask for a referral.
  • Joe kept personal files of every customer that included notes about their lives, families, pets, jobs and more. This helped him to develop a closer connection as he showed a genuine interest in their lives.
  • He sent greeting cards to every customer, every month (and another on Christmas), year after year with a simple, positive message.

Through this system, Joe rose to extraordinary heights in the world of sales, not only selling an inordinate number of vehicles but also touching the lives of thousands of customers. 

And you can do just the same. 

Making a Difference in Your Customers’ Lives

The key to Joe’s success was his positive effect on each and every customer he met in the Chevy dealership lot. You can achieve this at your business simply by taking an interest in your clients and their lives.

With a focus on the relationship, you make a positive mark—and customers will be far more likely to encourage their family and friends to do business with you. 

In that light, consider the following questions:

  • How can you stay in touch with clients after a sale? 
  • In the time you spend together, how can you show them you care? 
  • How much do you know about your customers’ personal lives?

With these relationship-building questions as the backbone of your referral program, it’s then the simple matter of asking for referrals from your happy customers.

Coming up with Referral Incentives

While many people will be happy to share a positive experience with friends and family, you can also “grease the wheel” by incentivizing your referral system—providing the referee with some token of gratitude following a successful referral. 

Here are some creative incentives you can offer for client referrals.

  • Discounts on future services or product/service upgrades
  • Cash rewards or other gifts
  • Incentives for the referral and the person referred (discounts, etc.)
  • Higher-value rewards for multiple referrals (say, five successful referrals)
  • Make a charitable donation in the customer’s name
  • Offer seasonal/holiday-themed incentives at special times of the year
  • Run a referral contest with a special prize for the winner
Getting the Word Out

Once you know how you’ll incentivize your referrals, you need to keep that information front and center in the customer’s mind. 

The best way to do this is to remind people of your referral system every time you communicate with them. If an email gets sent out, end with a P.S. about the referral system. Following a phone call, remind customers what they have to gain by referring a friend who will benefit from your services.

Done well, this is not overwhelming or annoying—it’s simply a natural part of the conversation. And the more you practice it, the better. Train all of your staff to remind customers about your referral system and watch it work its magic on your company.

Your Step-by-Step Marketing Blueprint:

Presale: Reaching Cold Prospects

1. Your Marketing Budget Guidelines

2. Your Target Audience

3. Your Message

4. Your Website

5. Your Traffic Channels

6. Your Nurture System

The Sale: Converting Customers

7. Your Sales Conversion Strategy

Post Sale: Creating Raving Fans

8. Your Customer Lifetime Value

9. Your Referral Program