A client of mine makes exclusive, expensive golf clubs – clubs that are tailor-made for his customers. His clients fit a certain profile. They are affluent, avid golfers who want to improve their golf game … and his clubs seem to help them do that.
My client reasoned that his customers, who love him and his custom-made clubs, know other people like themselves. But although a lot of his business comes from word-of-mouth advertising, he had never put a formal referral system in place – until I recommended it.
After testing and refining his pitch, here’s what he ended up with:
“Joe, you’ve been coming to me to make your clubs for several years now. I know you’ve been getting positive results. You’ve taken a few strokes off your game, and you like the look and feel of the clubs, right? I have to tell you that I’m getting a little frustrated in my business. I have plenty of customers, but my favorite customers are people like you who truly appreciate my work. That’s where I get the real satisfaction in my business.
“I’ve decided to reduce my client base to people who enjoy my work – those people, like you, who appreciate my clubs. I’ve decided to limit my business to a select few customers – and since you’ve been such a good customer, I don’t want you or the people you respect and care about to miss out.
“Here’s my proposition: I’ll provide your friends free use of a set of my clubs for a month. If they like them, maybe they’ll buy a custom-made set of their own. If they don’t like them – if they don’t shave a couple of strokes off their game – all they have to do is return the clubs, no questions asked. For every friend you refer to me, I’ll add a new club to your set … just because you’ve been such a loyal customer. There’s no hidden agenda, Joe. I get the satisfaction of dealing with customers who respect and enjoy my craftsmanship – people just like you. And if your friends happen to enjoy the clubs and order a set, they’ll be grateful to you for sending them my way.”
How did it work? It was a hole-in-one! My client soon had more business than he could shake a golf club at!
Here are some other success stories. See if you can adapt one of these referral systems that my clients have used for your own business or practice:
A client of mine is a consultant in the Far East. He offers new clients two compensation options: The first is a large consulting fee. The second is a respectable discount on that fee in return for two referrals. Ninety percent of his clients accept the lesser-priced referral deal. (By the way, my client expects his satisfied clients to not merely provide names, but to actually call or visit the intended referral and get them to contact my client. It works!)
Another client of mine holds regular customer briefings at a prestigious hotel every month. He invites every one of his customers to bring along one qualified guest. Fifty percent of the customers attending do bring a guest, and half of the guests become my client’s customers. Why so many? Because they wouldn’t want to come to the briefing unless they had a strong interest in my client’s area of business.
Another client of mine sells training materials. He put together a $5,000 package that he sells to customers for just $2,000, and he throws in free attendance at two $600 training programs – as long as people buying this package agree to persuade two of their business friends to attend at least one live $600 training program a year. If they don’t get at least two people to come in any 12-month period, my client actually “short-rates” them. In other words, he’ll bill them for the $3,000 savings and the free training sessions. This approach has sparked many people to really work hard getting him referrals. Over 60 percent of his business now comes from referrals – up from only 10 percent a year ago.
A client of mine who does tax preparation tells each of his clients that if they will send him two referrals, he’ll give them 50 percent off on their tax-preparation work. He supplies them with an introductory letter explaining his credentials. Over half of his new business is produced by extending his valuable service to relatives, neighbors, and friends of his present clients.
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”– Jeff Bezos