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Referral Strategy Explained

As business owners, we all try to deliver the best solution with our products or services and invest energy, time, and money in customer experience.

However, what is different from business to business is how we build relationships with our clients.

Some businesses go as far as relying exclusively on referrals. A referral is a recommendation given to a new client by a previous client.

Businesses relying on referrals for growth have a strategy in place.

Like any other strategy, a referral strategy has processes and steps:

Your business is referable

The qualifier for a referral strategy is the fact that your business is referable. Your products and services are top quality. You invest in customer experience and have a smooth customer journey process in place.

Given that your business is referable, you come to the next step.

Thank your old clients for referrals

Remember if any of your previous clients were referred to you. Take some time to thank those clients who referred the new ones. This act of gratitude gives your old client an incentive to offer even more referrals when a chance allows.

Make your communication personal

'Thank you' message for a referral coming in the form of a personal phone call or a paper card with a hand-written note on it gives a personal touch and nurtures the relationships.

Why does it work?

Because in the times of automation, when emails and letters from companies insert your name tag from a database, we learned to appreciate every personal touch in communication.

New client

A new client does not always expect any extra effort from you except top-quality products or services. Investment in relationships would be a pleasant surprise for them. Entrepreneurs who decide to nurture relationships with their customers create a list of touchpoints infused with personal signs of attention, e.g., a 'welcome' card, personal congratulations on special occasions and holidays, or an end-of-journey appreciation gift.

Everyone can drop a thank you email, but not every entrepreneur invests time and energy in going one step further. If you treat your clients like mass production, they don't have an incentive to return to you for the next service or product because the shops down the street sell the same good quality products. Neither have they an intention to refer to you.

At the same time, if your client feels meaningful, they will reply with loyalty. And that's what we as businesses need. It costs almost nothing to have a referred customer than to earn a new one.

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