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When it comes to customer referrals most people leave little to be desired. By the way, what is the number one reason most people don’t receive a referral from a customer? It is simply because we don’t ASK. What is the second reason we don’t receive a referral? When we do ask for a referral, we do not ask it the RIGHT WAY.

Here are the 6 steps to building a Formal Referral Program that will work every time:

Step 1: Make the commitment to being a “Referral Based Business”. If you are in business, you are in the relationship business. What better way to grow your business then by building strong relationships with your best customers? A referral-based business should have as one of its core values the idea of taking care of its customers in such a way as to earn the right to ask for referrals. Lastly, since 80% of traditional advertising does not work anymore, referrals work amazingly well and the best part is they are free!

Step 2: Set up a meeting or a phone call with your best customers, keeping in mind the notion that “birds of a feather flock together”. We would like our best customers to refer us to people just like them. When you set up the meeting, let them know that you would like to ask them a couple of questions about your service and it will take less than 5 minutes.

Step 3: Ask the customer service question this way: “Mr./Mrs. Customer, during the time we have been doing business together, what would you say have been the top 2 or 3 greatest benefits to you (or your business)?”

Thank them for their answer, then ask this question: “How has (their answer) affected them (or their business) specifically?”

For example, let’s say my client’s answer was their greatest benefit has been gaining more time. I would then ask: “How has more time affected you specifically?” They may answer they now have time to watch their son play baseball or take a vacation. Once you have their 2 or 3 greatest benefits of doing business with you, thank them again.

Step 4: Ask for the referral this way: “Mr./Mrs. Customer, who do you know who would appreciate (their top 2 or 3 greatest benefits of doing business with you) the way you do?” When we use our customer’s own words to validate our value proposition, almost always they discover a friend or acquaintance whom they believe can benefit from our business.

Step 5: Engage the customer in bringing the referral to us. Thank the customer for the referral, then ask: “How should we go about introducing me (or my business) to your referral?” The customer might agree to call the referral, or arrange a meeting. Be prepared to coach the customer on ways for you to meet the referral.

Step 6: Follow up with customer who gave the referral. If you begin a relationship with the referral, make sure you follow up with your customer with a nice handwritten card and perhaps a small gift to show appreciation. If you have been unsuccessful in doing business with the referral, then by all means politely let your customer know. Often the customer will offer to help you make contact with the referral.

In today’s high tech, low touch ways of marketing, relationship based sales is still the most effective way to grow any business.