As humans, we need five necessities to survive: Air, water, food, shelter, and sleep. From a physiological point of view, without these items we will die. From a psychological point of view, there are good arguments that we also need sex and a sense of belonging to thrive rather than just survive.
It is the psychological aspect that I want to focus on here. Not the sex aspect -- disappointingly! -- but rather the idea that, for our mental health, we need to feel that we belong in a group to feel at one with the world. Many studies have shown that people will unintentionally mirror another person’s accent, gestures, body position, and other attributes to seem less threatening and to fit in socially.
Yes, this all might sound a little too esoteric for a tech reseller column. But good resellers the world over are using this information every day to improve their business bottom lines.
No, I am not talking about salespeople trying to copy accents. I am talking about the power of the referral.
Let me pause here for a moment and tell you that I am not about to launch into some lecture about asking for referrals or having referral promotions that reward your customers for referring their friends to your business. Organizations that use these tactics inevitably have a hard time keeping their salespeople on target, and the referrals have a certain feeling of being fake -- only used for a person to receive a reward by making a recommendation.
50 bucks and a lifetime lesson
When I was still at school I had a friend (yes, I actually had more than one, but this one in particular) and his dad made me part of his referral program. He owned a car dealership and for each lead I sent his way that resulted in a sale I was paid 50 bucks. For a kid at school -- already running a small business -- that was a lot of money, so I used to tell everyone to go and buy their cars there. I had no idea if the dealership was any good or even if the brand was great, but I was keen to get my hands on $50. As it turned out, the brand of cars they stocked were apparently not the greatest and the dealership was shut down a few years after I left school. So my recommendations to people were not really based on any great knowledge. They were referrals with no substance.
The referral I am talking about is the true referral. A client is so impressed with what you have done for them that they want to boast to all of their friends and business associates about the great service they received. They are not expecting any financial reward. They are not driven to refer your business for financial gain. These referrals are the bread and butter of all great businesses and bolster the bottom line in two ways. They don’t cost anything and they increase sales. Zero increase in expenditure and additional income sounds like a great way to drive profits. So how do you get in on the act?
Easy. Do nothing. Or more precisely, do a lot -- but a lot of what you already should be doing. Offer exceptional service. Under-promise and over-deliver. Deliver solutions, don’t sell products. Remember that profit is something that happens while you are solving problems for clients. As Walt Disney said, “Do what you do so well that they will want to see it again and bring their friends.” He was talking about movies, of course, but the equivalent quote would be to do what you do so well that your clients want to boast to their friends about the experience they had.
Sense of belonging
Maybe it is just me getting old or maybe it is real, but I find that people in general are more time-poor than ever before. Part of the attraction of the referral is that it saves a person time. When friends are talking and one says they need to buy a new widget, if a trusted friend says they just had a great experience buying a widget from your business, it saves that person all the research time they would have otherwise dedicated to finding a good reseller. And when they call your business and they say that another client recommended them, they instantly feel part of the family. It is part of that sense of belonging or bonding that humans require.
If you still aren’t convinced referrals are good for your business, let me throw a few stats your way. International surveys show that 92 percent of people trusted referrals from people they knew. It makes sense. If my friend tells me they ate at a restaurant and the food was great, that is enough for me to be convinced the food is great. If you are after new business (it seems like a good idea), then think about this one. About 65 percent of new business comes from referrals. You may not even be aware of the referrals that you are receiving. For just one week, try asking new clients what brought them to you. The majority won’t be from that incredibly expensive social media campaign or that glitzy new video that you were charged exorbitant fees for. The majority will be from referrals.
The lifetime value of a new referral client is 16 percent higher than a client achieved via other means. I could go on quoting statistics (actually that is all I have at the moment), but you don’t need stats to know the truth in what I am saying. The power of the referral is incredible. If you want to keep new business flowing in, work out creative ways to get your clients to keep talking about your business and what you have done for them. Maybe implement a procedure to follow-up with a client a few weeks after delivering a solution to make sure everything is still working well. Maybe send them a message on their birthday. There are lots of ways to subtly remind them about the great service they received – which means they will keep talking about the great service they received.
Whatever you do, never underestimate the power of the referral. Your business growth depends on it. And think about the good you are doing for your clients by helping them feel that sense of belonging!
Photo credits: Pexels, OTA Photos