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How to Create a Referral Sales Engine

BY DIGITECH - October 15, 2014
Web Design

Word of mouth marketing really works. Don’t take our word for it, Nielsen found in a recent research study that 77% of consumers are more likely to buy a new product when they hear of their family or friend’s experience with it. There are businesses out there that do not send a dime on marketing, and it’s because their product, services, and reputation are so strong. Keep in mind that a word of mouth system can work for you or against you. Even if you deliver excellent services, you’ll gain a bad reputation if you cannot manage the people who have been referred to you. Here are some steps in how you can create a word of mouth, referral sales engine.

Underpromise, Overdeliver

The top companies in the world perform this small technique time after time. They under-promise the results of using their product or service, and smile when the customer is shocked or stunned by the results. This instant surprise that the customer experiences leads directly to a referral, usually in a short amount of time. Thus, the goal of any business owner is to be as conservative as possible when offering things like the R.O.I, delivery time, or anything possible without sacrificing sales. By doing this, they are thinking strategically as opposed to tactically and only trying to make the one sale.

Setting Up a Referral Education System

If a person embraces the concept of over delivery, usually things take care of themselves after that. Therefore, it is critical to educate your referral sources. This can only be done if you’ve accurately identified your referrals and equipped them with the tools to support your business. Here are some ways to help educate the customer on the referrals and other information:

  • How are you different? It is critical to relay to the referrer your unique value proposition. This will help summarize why your service is different than the rest of the competitors.
  • What kind of client are you looking for? Educate the referrer on who your dream client may be. By doing this, they will know what type of client they should look out for so that they can refer them to your service.
  • Equip them for success – Some people have created full on-board affiliate programs in which all of the referrals are tracked by link codes, phone number codes, and more. Make it easy for your referrer to send someone your way. Also, begin providing excellent, high value content that’s very “shareable”. Hint: Videos usually do the trick.


    Just Ask

    It’s a good idea to simply ask for a referral. Also, do not ask only once, create a methodical referral request process to ask one client multiple times! After many years of doing this, you can rest assure that the results will take care of themselves, even if you annoy a couple of people. Keep in mind, that most people do not view referrals as a selfish act – they see it as “Hey, maybe this guy/gal is just getting me to help others, maybe I should do that”.

    Very rarely will the referrer respond to your request as negative. Usually, the response for a professional request is usually positive and polite.

    Referrer Recognition

    It is an excellent idea to keep in touch with your high value referrers (people that generate the most business for you). Get behind them and show them your enthusiasm and support. Even give them extra surprise incentives to keep them working hard for you! Remember, a happy referrer is just as good as any salesperson that you can hire, because they have their own prospecting list and a genuine sales pitch!

    If you have an e-mail list of referrers, send out weekly or monthly updates to them and give updates on the best referrers for your company. You may even want to think about advertising a prize, for example, if you have a referrer that’s literally transforming your business (yes, this is possible), then you may want to offer that person a high value prize like a free HDTV or even a small vacation package.

    Experiment with Different Methodologies

    Be a consistent learner. In order to become successful at the art of word of mouth marketing, one must consistently experiment and improve their techniques. Either your company will become better, or the magic well will run dry. Therefore, every single time you send out your weekly or monthly referral quests, simply do a split test and keep both messages the same except for one factor.

    For example, the subject lines of your e-mails may be exactly the same except for one or two words. Or maybe you want to experiment with an educational message telling customers how they can earn money, or a message that tells people how they can help others through referrals. By experimenting with different techniques on a regular basis – it is possible to get a great feel on what is effective and what is not.

    The Importance of Consistency & Trust

    The reason why most word of mouth marketing campaigns are overlooked is because most people overlook the importance of consistency and trust. Let’s be honest, they aren’t the most exciting things to talk about, but they are the most important! For example, even if the referral request efforts are not working, most marketers will feel the need to shut it down and to try something else. It’s not until later on down the line when they get an influx of referrals – is that they realize they should’ve never stopped.

    Always ask for referrals, because if you do not, then your business could experience a dry period in which guerrilla marketing has to be incorporated to keep the business afloat – and guerrilla marketing is usually not as of a long-term solution as word of mouth marketing, which tends to have exponential effects overtime.

    When doing this, think about it like a penny that doubles itself over a span of a month. After 1st day, the person holding the magical doubling penny will only have 2 cents. However, the 1st week, they will see $1.28 in their bank account. This may not seem much, but it’s significant progress. Here’s why, the penny increased 128% in simply the span of a week. Furthermore, just a week later, the penny will rise into $81.92. Not bad to only start off with one cent! In the following week, the penny will reach a value of $10,485.76! This is great. The shocking results come at the 30th day however. If the penny were to double every single day without it being spent, the person would make $5,368,709.12!

    Now do you see why word of mouth marketing is so important?! It’s an exponential effort with invisible results. At first, you will not see that much from your efforts, however, as time goes on, you will see your wealth multiply tremendously!