Jim Rohn, the great sales trainer and motivational speaker, once said:
“One customer, well taken care of, could be more valuable than $10,000 worth of advertising.”
He was talking about two things. First, a happy customer will be a lifelong customer, which means they will continue to spend money on your services and products.
Second, a well taken-care-of customer will give you thousands of dollars in referrals.
This applies to almost any business—personal training, real estate, finance, coaching, and even funeral homes. (Think about it. When people choose a funeral home, where do they go? The Yellow Pages or to a trusted friend?)
Referrals are the best way to get clients for 99% of businesses because…
- They are no or low cost, as you’re working with warm leads and asking someone else to make introductions. You don’t have to invest a lot of time or money into getting referrals.
- They are “warm leads,” and are easier to convert to clients because they come via a reliable recommendation and pre-seeded trust.
- They often lead to an immediate sale, cutting out the sometimes long, drawn-out process of courting cold audiences via advertising.
The bottom line is that referrals are the low-hanging fruit in your business—the easiest way to get generate revenue, and at a high profit margin.
But how do you go about picking this “low-hanging fruit”?
Beginner entrepreneurs often think that referrals happen naturally—either because they believe their service/product is in demand, or the quality they offer speaks for itself.
The reality is, most of your clients are too busy to think about, remember, or deliver a referral for you. After all, you’re the one benefitting from it—not them.
But if you have built trust with your customers and make the referral process easy, they are likely to seriously consider referring business to you. Why? They believe in you as an entrepreneur.
Also, sending you new business makes them look like a hero—they solve a friend’s problem while giving you profit. It’s a win-win, and they can take credit for it.
But before you celebrate that victory, you need ASK for a referral directly.
So let’s set up the right referral system to make the “ask” easy:
Step 1: Create a spreadsheet to track your referrals
This doesn’t have to be fancy; just create a simple spreadsheet in Excel and keep it on your desktop. Include, at the very least, loyal, longtime customers’ names; basic contact information; a column to log all communications; and a list of any gifts you send them. Make this your sales blueprint.
If you’re working with a larger sales team, you can put this sheet up on a board for everyone to see. You’ll notice that it becomes a motivational tool; everybody wants recognition for bringing in sales, so give the sales people who land big referrals public kudos.
Step 2: Send a gift or offer commission
Using your loyal customers as a starting point, spark the referral conversation with a gift.
There are so many options here, depending on your industry. As a personal trainer, I used to send healthy snack baskets to clients. Real estate agents and financial advisors are known for sending higher-value, personalized gifts—flowers, chocolates, wine or Champagne, etc. Coaches will often send productivity tools like leather-bound notebooks or journals.
In my new business coaching program, I take a different approach. I send money. Lots of it.
Whenever a friend refers a new paid-in-full client ($5,000) my way, I immediately send them a check for $1,000, along with a copy of my Perfect Day Formula Kit. This encourages people to refer even more business to me.
Be mindful of what gift you send, however. It should represent you and your brand, be truly useful or enjoyable, and not contradict your mission or vision. Don’t send a gift that is an inconvenience either, like the person who once sent 50 pounds of unwanted exercise equipment to our office (where it sat unused in a corner for months).
Step 3: Say thank you
There’s no question that your gift or commission will let your customer know you appreciate them. But take advantage of the opportunity and include a thank you note. Be genuine in your appreciation for their business (hand-written notes are best) before you ask for new business.
After you make it known how much you value their business, ask for a referral.
Here’s a sample note that I send to my workshop clients, written in a nice thank you card:
“I’m so glad I was able to help you take some big steps forward at my recent workshop! As you know, my mission is to transform 10 million lives using The Perfect Life Formula, so please, if you know someone that needs the clarity, systems, structure, and success that my workshop will bring them, please make an email introduction between them and me. I sincerely appreciate you!”
I then attach a schedule of upcoming workshops so they can easily forward it along to friends, family, and colleagues.
Step 4: Give them the referral script
After thanking your client and graciously asking for a referral, you need to make their follow-through easy. The best way to do that is by giving your client the exact script they need to make an initial introduction.
Whenever possible, I include scripts in my gifts/emails that clients can easily use to introduce me to people they know who might benefit from my coaching.
Here’s a sample (that I update depending on the customer’s industry and what their referrals may need):
Remember that conversation we had about your desire to grow your business faster and keep your life on track?
And then I told you about my coach, Craig Ballantyne, and his Perfect Life Workshop. It changed my life!
Well, Craig has a workshop coming up in ___ and I really encourage you to go.
And that’s also why I also wanted to introduce you to Craig today. He’s happy to jump on the phone with you to hear more about your business and how he can help you out.
___, please meet Craig Ballantyne.
As you know, I have been working with Craig for a while now and have seen him make a massive impact in my business and my life.
Attending his Perfect Life Workshop was one of the biggest game-changers for me personally and professionally over the past year.
He is raw, real, authentic, and has the biggest heart to serve and help others just like you and me. He is the coach I lean on the most when trouble hits and he has an amazing way of making everything okay and SIMPLE 🙂
Craig, please meet my good friend ___.
___ is a close friend of mine. [Insert details about business and location.] He/She is ready to do whatever it takes to grow their business and help people change their lives.
Craig, I know you are the perfect person to help them navigate their path so they can dominate their days, achieve their big goals and dreams, and play up to their full potential in every area of life.
I am so grateful to have had the chance to connect you.
I’ll let the two of you take it from here.
Ask you can see, the script introduces both people with basic background information, points of commonality, and genuine recommendations. The benefits of this budding new relationship are clear.
And in case you’re wondering, this formula works no matter what industry you’re in.
Step 5: Keep asking
Part of the success of the “culture of referrals” is persistence. A one-time gift is nice, but it’s not enough. You should be reaching out to your customers regularly to ask for referrals.
As my mentor and coach Bedros Keuilian says, it’s important to “train” your customers in this referral culture starting the moment they enter your business. Make the “ask” a mutually beneficial proposition. Bedros puts it like this to his new customers: “As I help you do XYZ, can I count on you to refer your colleagues/friends to me to help me reach more people? The more clients I get, the better I get at XYZ, and the more I can help you.”
Follow this script. Not only will you be giving your customers done-for-them tools to make referrals easy, but you’ll make them heroes for helping friends/colleagues, bringing you more business, and improving the services or products they receive from you.
It’s a win-win.
The words of Jim Rohn hold true—a cared-for, referral-primed customer can be worth more than $10,000, $20,000, or $30,000+, and far more than any investment in advertising.
Need help getting your business—and life—on track?
Consider signing up for one of my upcoming Perfect Life Workshops, where I work one-on-one with you to help identify your biggest challenges and develop a plan to overcome them—all on the way to making you more money and giving you time to spend on the things that matter. Learn more about this unique opportunity here!