Need more customers? Try Asking!In all businesses, there is a profound need to keep putting new prospects into the top of your sales funnel. I find a lot of business owners ignore one of the biggest potential sources of new prospects that is sitting right underneath their nose. They simply fail to ask their current clients for referrals. One of the best places to find new customers is talk to your existing customers, they certainly have friends, colleagues, vendors and other people they work with that may also have a need for the products or services that you offer. Many times they will be willingly refer you and your business if you simply ask them to and tell them how to refer. I just recently launched a referral reward program for our executive suites business. Though our executive suite is currently running near 100% occupancy, we have a nearly unlimited ability to serve virtual office clients without significantly reducing our overhead costs. So to reach my goal to double our virtual office business within the next six months, I created the Brandywine Executive Center Referral Rewards program to help my team have a steady stream of new leads to talk with about our services. One of the biggest benefits of using customer referrals as a lead generation source is they are going to hopefully be familiar with you and your business. They also come with a built in testimonials source from the person that referred them. This provides the social proof that the prospect will be looking. They have been referred by someone that they know and trust to your business. Care must be taken that this trust not be broken. It is important to make sure that these leads and prospects get treated with the highest level of service possible. You never want to jeopardize the relationship with the existing client by making him or her look bad to the person that they referred. This is the way to destroy or seriously impact the relationship with your existing client. One of the biggest questions to answer when looking at creating a referral program is whether or not to incentivize your existing clients, patients or customers for these referrals. Certainly I believe a referral program that is incentive-based will always outperform a referral program without an incentive. When figuring out the incentive program, the first indicator that I look at is my current cost to acquire a new customer. I then ask myself am I willing to spend that entire amount on the referral program. The answer is nearly always a resounding yes. For example, it is common in the executive suites industry to pay a referral source whether that be a commercial broker, a Web broker or other lead source a 10% commission on the first year of service of the new client. That means for my business it costs about $175 for me to acquire a new customer through these channels. For my referral program, the amount paid to a client for a successful 12 month virtual office client is approximately $75. I can then incentivize my staff that works to close that prospect into a new agreement with a $75 commission payment. My total acquisition cost for that client is $150, generating a savings of $25 per lead that is converted into a new customer. Leave a Reply |
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