The Wrong vs. Right Way to Ask for Customer Referrals
You probably know that customer referrals are a cost-effective way to get sales leads and grow your business.
After all, you spend little-to-no money to obtain a referral. And according to a study by the Wharton School of Business, a referral customer has a 16% higher life-time value since they’re more likely to remain a loyal customer and continue doing business with you.
But to get customer referrals, you have to do one thing – ask for them!
However, for some people – and maybe that includes you – asking for a referral could be too uncomfortable or intimidating to do. But perhaps, that’s because you’re not asking the right questions to successfully get the right customer referrals.
The Wrong Way to Ask for a Referral
A lot of business owners just don’t know how to ask for a customer referral. They may say something like:
- “Do you know anyone who is thinking about buying our product/service?”
- “Who do you know that might be interested in buying our product/service?”
- “Do you know anyone who could use our solution?”
Unfortunately, this approach often leads to your customer pondering the question for a second and saying, “Well, not at the moment, but let me think about it, and I’ll let you know.” And then what happens? You never hear from them.
The problem with this approach is, you’re asking too broad a question. You’re forcing your customer to think about EVERYONE they know while trying to decide WHO could benefit from your products or services.
The Right Way to Ask for a Referral
When asking for a referral, you need to be more specific when formulating your question. Request a name instead of vaguely asking if they know of “anyone.” Tell them who your target customer is. Ask for leads that can benefit from the precise solutions you can provide. For example:
- “Can you give me the name of a friend who lives in Hendricks County that has a house that’s 10 years or older and needs a new water heater? Someone who’s tired of running out of hot water?”
- “Can you give me the name of an Indianapolis small business owner you know who is rapidly expanding and hiring more employees, but could use help keeping up with their payroll process?”
- “Can you give me the name of a family member or friend that needs dental care, but doesn’t have dental insurance and could benefit from our low-cost, patient-courtesy program?”
By framing your question in this manner, it helps your customer narrow down who they know that best fits your request. Therefore, you’ll increase your chances of getting a better lead.
For the next week, my challenge to you is to:
- Develop a customer referral “ask” question that specifically targets the type of referral you want for your business.
- Identify five loyal customers that you think may know some of these potential customers.
- Call and ask them for a customer referral.
Let me know how this approach works for you. I bet you’ll get some new referrals.
To your success!