Customer referrals are a powerful way to acquire new customers and grow business. According to Nielsen, the average person is 400% more likely to purchase a product that was recommended by a friend. Customers who are referred to your company are also, 37% more likely to make a repeat purchase. A referral-based marketing strategy is usually a strong one.
Online reviews can be just as powerful as personal referrals. According to the SEO software company BrightLocal, 84% of people trust online reviews as much as they trust recommendations from friends. Whether you’re looking for an online review or a personal referral, a survey is an ideal way to ask your customers to recommend your product or service to others.
Timing is everything. If the value of your product or service is immediately apparent (if you’re selling food, for example), ask for a referral right away. If the value of your product or service isn’t immediately apparent (if you’re selling enterprise software, for example), ask for a referral later, after the customer has had time discover the product’s real value.
When the timing is right, send out a customer satisfaction survey. Depending on the volume of business you do, you might want to automate this step with an email cycle. The Net Promoter® Score (NPS) Survey is the best option for building referrals, since it specifically measures the likeliness of a customer to recommend a company, product, or service to others.
Dissatisfied customers wouldn’t recommend your product, so don’t waste their time asking for a personal referral or encouraging them to leave an online review. Instead, direct your requests at those customers who indicate that they’re very satisfied with your product or service in their customer satisfaction survey.
To request a referral, you can follow up with satisfied customers, by phone or email, or you can build different paths into your survey, by using what we call logic options. Logic options send survey takers to different questions, based on their previous answers. For example, they can let you withhold a referral request from a dissatisfied customer and extend one to a satisfied customer, all in the same survey.
When customers recommend your product to someone, they’re putting their reputation on the line for you. That isn’t something most people do lightly. When companies request a referral, they sometimes forget what’s at stake for the customer and, ask them to do too much.
According to Inc., companies looking for referrals often ask customers a variation of the question: “Do you know anyone who would be interested in our solution?” To answer this question, the customer must think about another person’s need for your product, interest in your product, and willingness to make a purchase. It’s too much speculation for most people.
Instead, be specific in your request and ask the customer to answer a less complicated question. For example, you could ask a customer who from their organization purchased your product, or whether anyone else at their firm struggles with the same types of problems If you sold furniture, you could ask a customer if any of their friends have similar tastes.
If a customer answers your question in the affirmative, use survey logic to ask if that customer would be willing to refer this person by passing on their contact information. This requires far less from the customer than a typical request for “interested” leads.
When a customer gives you someone’s name, they expect you to follow up with that person. They may even tell that person to expect to hear from you. If you don’t follow up with referrals in a timely manner, you lose the trust of the lead and the trust of the customer who referred you. It’s important to treat every referral with the value it deserves.