Want Referrals? Ask for Them!

5 Steps to Turn Customers into Business Advocates

by Ron Cates,  Constant Contact Development Director, Southwest Region

"Your best customers are your existing customers." That's the powerful message we drive home every day with all the businesses, services, and entrepreneurs Constant Contact works with. It was true 100 years ago, before mass media marketing. It was true 10 years ago during the Internet boom, when the economy was soaring high. And it's especially true today, when businesses of all sizes are striving to stay alive and thrive in a rocky economy.

A common mistake small businesses make is spending too much time, energy and resources trying to attract new business while losing focus on existing customers. Existing customers buy from you more often and spend at a premium-more so than new customers. And if you develop relationships with them, they can become advocates for your business and send referral business back to you. It's like having an extension of your sales force (that's not on the payroll).

Existing customers act as a natural referral engine for your business. Research shows that after four purchases, a customer has already referred up to five people. You didn't ask for those referrals-you got them because your customer values your business enough to recommend it to someone else. Imagine how much your business could benefit if you worked with your customers to bring in those referrals!

Ongoing interaction with your customers in the form of regular, informative emails can multiply your referrals. Here are five steps to leverage your customer base to earn more business referrals.

1. Want referrals? Ask for them.
Don't assume that customers and subscribers know you'd like their business referrals. Here are two ways to use email marketing to ask:

• Put a message in your communications that says, "We'd appreciate your referral business," along with your contact options. If you sell from your website, include the website address.
• When someone signs up for your email list, put the same referral messaging in your Welcome message to them.

2. Make it easy.
Put your "Forward this email to friends" link where readers are most likely to see it, toward the top of your email.

3. Identify advocates, then educate and enlist them.
There's one question you can ask customers that is the clearest indicator of how successful you're going to be in gaining their referrals: How likely are you to refer us to a friend or associate? Use ListenUp! Online Survey to ask them to rank their answers on a scale of 0 to 10. The people who answer 9 or 10 are your strongest supporters and promoters.

To get even more business intelligence, include an open-ended question at the end of your survey asking, "What could we do differently to gain your business referrals?" Use that information to help make changes to your business to turn your customers into advocates.

Using your survey results, identify your strongest business advocates. Segment your list to put these best customers into their own category-your biggest fans. Then educate them with information that you wouldn't necessarily share with everyone on your list. Tell them about your company history and your approach to business. Give them the tools to go out and "sell" your business in the form of deeper information about your company, products, services and expertise.

Sharing "insider information" makes your best customers feel special and empowers them to advocate for your business and send referrals your way.

4. Clearly state your target audience.
Now that you have your list of powerful business advocates, be willing to share with them who your target customers are. You could tell them in your email, "We're looking to expand our business. If you know other [insert your target customer], we'd love to hear from them."

5. Provide incentives.
Develop a sense of community among your best promoters and supporters. You want them to feel like not only valued customers but real-world advocates who are part of your community. (Apple does a good job of cultivating this sense of community among consumers.)

Sometimes a branded gift in the form of a T-shirt or hat can further encourage your business advocates to send referrals to you. It helps them get excited about your business, and they're promoting your business at the same time.

NOTE: Due to changes in the CAN-SPAM act, we do not advocate that email marketers attach incentives (merchandise, financial, or otherwise) to the "Forward to a friend" function. There is no incentive for "Forward to a friend" except goodwill. If you're offering an incentive, word your forwarding link to clearly state your business request and offer, e.g., "Refer an associate's business to us and earn a free thank-you gift!"

The bottom-line is: Your current customers are your best customers. And within that group are your ultimate fans. Focus some effort on nurturing those relationships and asking directly for business referrals. If you follow the five steps above, you're more likely to deepen your customer relationships and gain those valuable business referrals that will help you grow and prosper.

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