It's easy to get excited about the dynamics of referrals and word of mouth.
If all of your customers referred just one extra person, you'd double your customer base overnight!
Of course, it doesn't work that way. But there's no denying the potential of having a process in place for generating referrals...
However, before you go out and create a referral system, you need to ask the hard question - Do you deserve to get referrals?
It's a question you simply cannot avoid. Because referrals only come consistently to those with a reputation for delivering 'Moments of Truth'.
Think of any number of businesses right now that you wouldn't feel comfortable referring others to. Perhaps they've done nothing 'wrong'. It's just that they've fallen short in subtle ways. Perhaps you didn't complain. You just stored away the memory.
Now turn the mirror on your own organisation. Are your customers storing memories of less than positive 'Moments of Truth'? Because no referral system on the planet is going to work effectively for you in those circumstances.
Here's a true story that dramatises this important point:
Many years back, our team in Australia helped create a referral system for a client in the suspension and wheel alignment business.
The system they'd designed for them had all the essential 'success' ingredients and the referral device looked great, so we featured it as an example in the marketing newsletter we published at the time.
To our dismay, after the article was published, our client reported back to us their disappointment that our superbly designed system just wasn't producing referrals.
However here's the twist.
In the meantime, another client of ours, also in the suspension and wheel alignment business, read that newsletter article, got excited, and 'carbon copied' the one we'd designed for his own business. He didn't know the system 'didn't work'!
Amazingly, he reported back that his referral system was working beyond his wildest expectations! He'd told us he had to put on more people to cope, and ultimately had to expand the size of his premises.
Explosive growth he put down to none other than the referral system!
As we discovered later, the first business simply didn't have a service ethic that 'wowed' people. Our second client Maure and his team worked hard to wow customers consistently.
They understood that people put their trust and their lives in the cars the team repairs and services. In every way, their service attitude was one of caring and safety. You only had to read through their 'Visitors Book' to know that their customers appreciate what Maure and his team did for them.
Above is Maure Kramer's version of a simple referral card that 'didn't work' for another business in the same industry. For Maure, this device created a flood of referrals, to the extent he had to increase his team and expand his premises. But he made sure he gave out hundreds and hundreds of these too!
Bottom line? If your business doesn't exceed expectations now, don't expect a 'system' to suddenly bring you referrals.
Here's a good place to start.
Try to assess just how much new business you get now through referral or word-of-mouth - without a system in place.
If it's relatively little, then you have a lot of work to do. If it's relatively strong, then you have some huge potential ahead of you by putting in a true, systemised referral process.
By the way, if you don't know how much referral business you get as a proportion of your sales ... then you need to find out now. As with every facet of the marketing in your business, optimising your referral outcomes only happens when you accurately measure where your business comes from.
In summary, Referral Systems is a big topic, but given that it's one of the most super high payoff activities you'll do to grow your business and isolate yourself from the 'tough times'.
To read more articles related to this go to Generating Leads.