How much do you tip a barber in Uzbekistan? There’s never been a reason for you to know, just like there’s never been an explicit expectation that your customers will refer business to you.
I met with someone recently who said they did such a great job at pleasing their customers that reciprocation of future business was, and I quote, “a given.”
Then he told me that at least 1/3 of their clients would refer them, and a large chunk of last year’s business came directly from referrals.
Almost all of my larger clients tell me something similar to this when I start working with them. I suppose there’s something about being an entrepreneur that breeds optimism…
However, when we looked at their data, the numbers showed a stark difference.
5%, 7%, best case 10% of clients referred others.
The other 90-95% hadn’t generated any referrals. Why is this?
I think it’s because a lot of companies feel like this; customers are likely to refer them because they do a great job.
But it doesn’t work that way.
When did we get the idea that in addition to giving us their hard earned money, our clients also owed us a whole host of attendant benefits on top of that?
We seem to expect loyalty, referrals, great reviews, evangelism… And for what? For doing exactly what we promised!
We’ve somehow convinced ourselves that the whole world is a restaurant, and everybody knows the unspoken rules about appropriate tipping.
Evergreen customers tell others, but not just because the company does a great job. It’s because the company is putting in the effort to nurture the relationships with those customers. They’re doing things outside the box and continuously adding more and more value to the customer relationship.
More so, and most importantly, they’ve made the very act of getting referrals another strategic marketing initiative. This IS marketing. And if you’ve read Evergreen by now, you know that everything after the sale is also a function of, drumroll….marketing.
Clients don’t just give referrals unless you market to the client to get referrals. We can’t expect them to know what to do.
It doesn’t happen by accident. And even more shocking – it rarely happens because you gave them what they paid for!
What are you doing to increase your referral business this year?