Many companies stumble blindly when they are creating a referral plan. Referrals can pay dividends for companies, but it’s important for companies to have a plan when designing a referral plan.
On today’s episode of The Sales Evangelist, Jay Gibb of CloudSponge shares insights about creating a referral plan and discusses some of the mistakes companies make in the process.
Avoid starting too early.
When you’re creating a referral program, you’re asking people to give you information about their friends.
Until you’re providing tremendous value with your product or service, it’s generally a bad call to ask for a referral.
One of the key measurements, according to Jay, is product-market fit: being in a good market with a product that can satisfy that market. Product market fit is a key component to referrals, because it indicates that you’ve found your ideal customers.
Once you’ve learned how to speak to them, and how to effectively speak their language, you’re more likely to be providing massive value.
With those components in place, you’ll have the tools to build a really effective referral program.
Offer the right incentives.
Especially on the B2B side, Jay said that many companies stumble in their incentives by offering only discounts for referrals.
Unless you’re dealing with the company founder, a discounted price in exchange for a referral won’t offer much incentive.
It’s also a good idea to remind the referrer that you’re planning to provide an incentive to the referred party as well, because people are altruistic, and they want to help others. They want to introduce someone they like to a product they like.
As you build your referral program, consider all four parties: the company and the individual who referred someone, and the company and the individual who were referred.
Make it easy for buyers to refer.
If your referral form requires customers to toggle between multiple pages in order to copy and paste email addresses, you’ll likely get limited results from your referral program.
Consider, instead, a way for customers to access their address books from the referral page. You’ll likely discover that most of your referrals come from people who uploaded their address books.
That’s why CloudSponge exists; to help companies offer an address book function without having to build it themselves.
Larger companies generally want to build their own platform, but they’d rather buy the address book component off the shelf because it’s a tedious process to build one.
Don’t forget the simple things.
Most importantly, make sure to ask for referrals when the time is right. Many sales professionals and companies neglect to ask for referrals.
If you’ve got happy customers and repeat buyers, call them and ask them to help you grow your company. You’ll be amazed at the response you’ll get when you ask for help.
Once they provide a referral, remember to say thank you. When the deal closes with a referred customer, send some kind of thank you to the referrer.
Doing so will have a compounding effect and make them want to refer more often. They’ll realize that your company cares about people, and they’ll regularly look for chances to provide referrals.
Consider, too, that customers may not always know of people who will benefit from your product. When that happens, consider asking for a review, a testimonial, or a case study.
Develop a funnel and a backup plan when you’re creating a referral plan.
“Creating a Referral Plan” resources
Consider giving a copy of the book Stop Selling & Start Leading as a thank you gift to someone who provided a referral. It’s a blueprint for sellers based upon years of research about the things buyers hate.
We’re so convinced that you’ll love the book that we’re providing a free excerpt to our listeners here.
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