What if you are planning to go to the movies on Saturday night?  There have been five new movies released over the past few weeks, and you don’t know which one to go choose. 

Your date is not happy about the last choice you made, so you have to pick carefully.  Do you look at the movie reviews, ask a friend who sees everything on the first day of release, or take your chances? 

Does the word of mouth excitement and anecdote told by your friend grab your attention or do you listen to the newspaper reviewer? 

I don’t know about you, but I go with my friend every time. He is able to tell me little details and I can see the excitement in his face as he talks. I WANT to see this movie. 

If you are selling a product or service, and you can get personal referrals and word of mouth advertising, you are one of the lucky ones!  You can say whatever you want about your product but if your customer says it’s good, it counts!

If you have a great track record, you may think you can rest on your laurels and just expect those referrals to come rolling in.  But, it rarely works that way.  UNLESS, the person who just bought your product happens to run into a friend who is shopping for the same thing, within a day or two of the initial purchase.  After that, the excitement wears off!

So, let’s look at some techniques you might use for your own business:

1. Take the example of a financial services company who sends cards to their clients with postage included, and asks them to send the cards to their friends and family.  The cards offer a free financial services evaluation to the friend or relative, and/or discounts or special ‘gifts’ to the person making the referral.

1. Get referrals by asking your most loyal customers to provide names and addresses, or email addresses of people they think might want your service, in exchange for a one-time discount at the register or online.  Or perhaps you might offer free shipping to your customers with every referral.

1. Give discounts or gifts for referrals, and make them contingent on the person buying the product, so if you send me the names of five people to contact, and one of them buys my product, I will send you a gift!

1. Referrals can also work in advertising if they are done as testimonials and they include the names of people in a local community or celebrities who have bought and used the product.  In this case, they would be called endorsements, but they still get the job done.  But, you probably can’t afford a big name athlete or chef to endorse your product, but you can get people to write comments in your guest book at the restaurant, and put their name and contact information.  You can mail them specials for the restaurant and ask them to bring a friend and get a discount.   Or you can call them and ask if you can use their endorsement in your local ads or on your website.  People love to see their name in print!

1. While we are talking about bringing a friend, I want to tell you about my friend, Bobbie, who owns an ice cream shop.  He came up with the novel idea of sending his customers a birthday card. 

First, he got his customer contact information by sending out coupons in his community.  When people turned in their coupons for their discounted cone, they had to flip over the coupon and fill it out with their contact information and birth date. 

Then he instituted his birthday card plan.  He sent birthday cards with a printed coupon on the card to invite the customer to come and get their birthday cone.  In addition to the free cone, the staff sang a silly song and gave the birthday celebrant a funny hat to wear! 

Customers liked this so much that they asked Bobbie how to get their friends on his list. He put forms out on the counter, in the shop, and customers could complete these forms and give them to him to send cards to friends and relatives. 

On the appropriate day, the friend or relative would receive a free card and cone for their birthday, addressed FROM THE person who put their name on the list. 

When Bobbie first opened his shop, his initial customer traffic came from within 3 miles of the store.  With the referrals cards and free cone program, he was able to increase his traffic to a 15 mile radius.  People would go out of their way to get their free cone and have a song sung to them for their birthday!

Bobbie did it right!  But, the fact is that most people do it wrong. They beg for customer referrals. 

I’ve included a letter in the Appendix section of this book, that you may find helpful in getting referrals.  You can use this and customize it for your own purposes. 

1. Letter E - Explains that it is a privilege for a person to be your customer.

1. Another great way to get referrals is to go to a company with a significant number of employees and offer them a special deal for their employees.  Amusement parks and Broadway Plays do this all the time.  The Human Resource or Personnel Department or the Gym in the company headquarters, keeps these vouchers and they put up a poster that advertises the service or product at a discount. 

Their employees can get the voucher from them and use it to buy the product or service from you, and you’ll know exactly where the referral came from because your vouchers will be coded for each company offer you make.  

1. If you offer professional services, you can connect with a related service provider.  For example a business lawyer connects with an accountant, and have that person send letters to their customers, endorsing your service.  You can do the same thing for them. 

Just be sure that you have thoroughly investigated the person you are endorsing so you don’t upset your own customer base by referring them to someone who disappoints them.  The services you offer can be discounted especially for the clients of the other service provider, thereby making those customers feel even more special and privileged. 

1. Letter F in the Appendix, shows you how you might approach this endorsement.

Now it’s your turn.  How can you take these examples and use them for your business?

What customer contact can I leverage to get referrals?  How will I get the customer to give me the referral?

Can I find fun or interesting ways to make my customers want to give me the names of their friends, co-workers and relatives?  How can I be the next ‘Bobbie’? 

Are there colleagues or other companies I can use to broaden my circle of prospects and get referrals?  Other related businesses?  Professional services companies? 

Are there approaches I can use in letters to promote my product, remind my customer that I am here and that he likes me and get him to give me names or to refer my product information to another person or company?