Referrals are so important, building on existing business is one of the easier ways to get new business! All organisations from dentists to banks have opportunities to “Wow” customers so much that they are bursting to tell everyone they know about the fantastic service they got.

Recently I was interviewed for some ideas on how to generate referrals for an article in an ANZ Banking Group client magazine “InPerspective” and a nice story was the result.

Here’s the story and some great “how to do it” tips.

Winston Marsh was walking along Collins Street, Melbourne, when he stopped to look in the window of a Montblanc pen store. As Marsh watched, a shop assistant donned a pair of white gloves before walking to a cabinet and selecting a pen, which he then carefully laid on a square of velvet in front of a customer.

Marsh, a marketing consultant, conference speaker and expert on generating business-to-business referrals, realised he was witnessing a skilful exercise in selling. “A $2,000 Montblanc pen fulfils the same function as a 20-cent biro,” he says. “The real difference is perception.”

All organisations have the opportunity to look at how they serve existing clients and add what Marsh calls “white gloves moments” to that service. “The white gloves tell a customer the company’s offerings are special, and later the customer will tell others about the experience.”

“Wowing” a client with a metaphorical white glove can produce a glut of referrals. Yet many organisations fail to try. Even fewer implement a referral system, which represents by far the easiest and most productive way to generate business, says Marsh. (A recent British survey showed that 80% of companies found word-of-mouth referrals to be the most effective form of gaining new customers.)

It’s extraordinary, Marsh believes, that many CEOs will readily assign a million dollars to an advertising campaign but won’t consider a strategy to generate referrals. “If you went out and bought a thousand of your clients a thousand-dollar gift and said ‘please introduce me to someone who might give me more business,’ your success would be huge.”

There are three failsafe ways to generate referrals, says Marsh:

Ask:

One survey has shown that on average only one in 100 businesses, large and small, actually ask clients for referrals. This can be as simple as saying: “Incidentally, is there someone else you know who’d appreciate what we’ve done for you?”

Creating a culture that encourages such requests must start at the top. “If staff are never encouraged or have no way of reporting the referrals they’ve got, they’ll know management doesn’t consider it important,” Marsh says.

Delight customers:

Deliver first-rate service and support always. And company people involved in new transactions should contact their clients afterwards, every time. “Whether you’re selling a power station or photograph, a two-minute call after the deal can deliver a customer for life,” Marsh says.

In addition, Marsh suggests ringing those who’ve sought a quote but haven’t bought from you to say, “We appreciate you have found someone else. If we can help with anything in the future, please contact us.”

“The reaction of the potential client? Wow!”

Have a system:

Systemise the process of regularly letting staff and clients know you need referrals and that there’ll be a reward when they introduce someone to you.

Recognition is just as effective. “As Napoleon said, men will die for a medal,” says Marsh. “Management should also make it clear to staff what kind of referrals they’re after, as a recommendation to a non-ideal client is unlikely to create business value.”

Rewards can depend on the amount of business involved and can range from vouchers and movie tickets to weekends in a five-star hotel. Occasionally clients may feel uncomfortable about receiving such largesse. Marsh suggests a response like “Anytime you refer business to us you’re saving us on our marketing expenses. We’d like to share some of that with you.”

All of this may seem common sense, Marsh concludes, and that’s precisely what good marketing is. “But don’t tell too many people or it will do me out of a job.”