Generating Referrals for Your Business

Friday, December 09 at 07:22 AM
Category: Business Banking
Not too long ago my wife and I owned a single location preschool.  Probably like your business, our greatest challenge was to create a steady stream of new customers.  Our second greatest challenge was to keep them.
Fortunately we had been keeping very good records on where our customers heard about us.  We got this information when the parent, usually the mother, showed up for a tour.  Not surprisingly, we found overwhelmingly that they heard about us through our web site and though other satisfied customers. When we saw this data, we immediately began focusing more on web site development, blogging, and creating a stronger customer referral program. 
Before we developed our customer referral system, we first conducted a simple survey of our customers to determine their level of satisfaction with the school, our teachers, location, curriculum, etc.  At the end of the survey we asked them two important questions:  whether or not they would be willing to refer a friend or neighbor to us; and whether they knew anyone with preschool age children.  Fortunately the survey results were great.
Armed with this information, we created our referral system.  Interestingly, this referral system also served as a customer retention system.  Here’s how it worked:
  • When a customer first enrolled we explained to them that our school was able to provide an excellent education to their child only if we gained parent referrals, and let them know we would be asking them for referrals down the road.
  • In each of our four classrooms our Director would make a brief appointment with a parent or two once a week to give them an update on their child’s progress, see if they had any questions, and ask them if they would take a referral form with them and have it back to us by the end of the week.
  • We tracked the date we had a conversation with each parent, and followed up with them to retrieve their referral forms.
  • As an added bonus, we offered each parent a $100 discount on their tuition for each new enrollment they brought to us.
The system was very successful and cost us nothing.  It gave us more scheduled opportunities to engage the parent regarding their satisfaction and also helped us generate more referrals proactively.
A second element of the referral system was a simple monthly e-mail newsletter to our customers.  We used iContact, which is very reasonably priced, and easily created a 3 or 4 page newsletter.  Parents loved the colored pictures of their kids having fun, and it enabled them to send it to their friends with preschool age kids.
Here’s the lesson:  Your marketing doesn’t have to be complex or expensive.  You have satisfied customers who would gladly buy more from you or refer customers to you if you just asked them.  The only real tools you need to get started are a survey and a tracking system.  Being a database guy myself, I hope you’re using one.  But hey, if it’s manual, that can work, too.  Either way you’ll want to develop a good tracking system with deadlines so you can stay on target.
Here’s a newsflash, too.  You won’t be very good when you start, especially if you have to train your employees to do it.  It’s different, out of the routine, requires more effort, etc.  You may have to do some internal selling and consulting with your team to get their buy-in.  Of course, the first person you have to see is yourself – your buy-in is the first step.
Let me know how your referral system turns out.
Scott is Database Marketing Manager for Arvest, and is also a serial entrepreneur. His role for Arvest is to help us better serve our business customers. For more information, articles, training and online tools, visit Arvest's Small Business Resource Center.
Tags: Business Banking, Scott's Articles
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