The one word answer is: ask!
Make it a process to systematically ask every client for referrals. Referrals from happy customers are indeed one of the best ways to generate new business.
When and how to ask is a matter of taste and practice. Let me give you two examples which apply to B2B.
1. Ask as soon as your prospect has made his buying decision.
From Steli Efti, Startup Sales Guide - www.startupsalesguide.com
"When a prospect has already made a buying decision, say: Great, but I can’t let you buy just yet. Right now, we are a startup. This means we focus all our energy, time and resources on delivering as much value as we can to our customers. We don’t have a big marketing budget. If you are happy with our product, please recommend us to others who you think might benefit from our solution as well.”
2. Ask when you are about 2/3 of a project, or when you have significantly progressed in the relationship with your buyer.
Here is some great material by Alan Weiss:
- Asking For Referrals: https://www.youtube.com/watch?v=pXJXukZB94s
- How to maximize a referral: http://www.contrarianconsulting.com/how-to-maximize-a-referral/
Hope that helps. Put it into practice this week and let us know how it goes!
What kind of product are you offering? The answer to your question differs based on your customers and potential customers. If you're in a more B2C format and selling to individuals, the process would differ than a traditional B2B.
A few basic ideas:
I would build a creative referral program that gives them something when they refer you to new or prospective clients. We have given a credit towards our customers software renewal, future discounts or simple things like a Starbucks gift card and a nice thank you note. If most of your customers are local, sponsor an event and ask them to bring their friends. Would love to hear more about your business and what you're currently doing to see if I could help.
If you don't read any further, two main things to keep in mind:
- Develop a process to make the ask (manual or automated)
- Make it easy for someone to refer.
It depends on how many clients you have and if you are consumer facing or enterprise. Statistics show the best time to get referrals is within one month after someone purchases your product. If you have a lot of purchase points you may need to automate it via a SaaS product (lots out there).
For B2B, I would highly suggest making this personal. Especially if you're solving a severe pain point, I would ask right after on-boarding 3 things: 1)Why did you purchase our product, 2) Anything you'd like to see, 3) Do you know anyone who can use our product?
For startups this can be especially useful as it helps your marketing strategy/positioning, development and sales.
This all of course assumes you have a good product/service that your customers are happy to share.
You're on the right track.
This is one of the most powerful kinds of referrals (there are four kinds, and the first to--which are the most common--suck).
I should charge you for this, but:
"Can you think back to the situation you were in that was the reason you hired us?"
"Can you remember what made you choose us give you the solution?"
"Who can you think of who is in this same situation, and would value the reason you chose to work with us?"
(There's the key question.)
"Would it be okay if you called them now to explain that, and see if they're interested in setting up a time for the three of us to talk?"
This three-person conversation is very effective.
Make your (good) intentions clear. How can you make it easy for your clients to take the time and tie their reputation to yours?
1) Be amazing. I have a few contractors and companies that I recommend to others all the time. Why? I am 100% confident in their services. The service/product they have provided was so exceptional that they never have to ask me for a recommendation - I am doing it all the time. In fact, I think that being able to point my friends and business associates to such stellar services makes me look good. Above all - be that vendor. If you are that vendor, all you have to do is ask, and your clients will say "yes" every time. If your service has been amazing, you can ask now, if you have a little work to do, progress to step #2.
2) Invest the time to show your value. Look who your clients know, target a certain type of potential client. Outline the service/product/value for that customer type. Know how it is similar/different from what you have done for your existing client. With that information at hand call you client and ask for the introduction. By preparing for the reference you show you will be worthy of the introduction.
3) Make the introduction easy for your client. If they agree, send them an email from which they can easily extract (copy/paste) the information they will include when they introduce you to their contracts.
Step 1: Ask your customers
"Thanks, Ted, we really appreciate your business. By the way, would you happen to know any other business owners who might need our services?"
The best time to ask is also after you've helped someone and they're really satisfied with your service.
Step 2: Ask people who turn you down
"Since you're not interested at the moment, Ted, would you happen to know anyone else who might need our services?"
Just because someone isn't an ideal client doesn't mean they won't recommend a friend who might be. It never hurts to ask.
Step 3: Pay a referral bonus
"Hey Ted, I don't know if we've mentioned this yet, but if you refer any friends, we'll give you a $50 gift card to Jack's Steak House. You can either give us their number or tell them to mention you when they sign up."
It never hurts to incentivize the referral process since sometimes people need a slight bit of motivation to recommend you to their friends.
These are the three things I'd recommend, and it all starts with not being shy about asking for what you want, especially when you've already helped someone and they're really satisfied with your services.
I have a slightly different approach than the listed ones.
The first one is set up a referral/partner network with associated documents, talking about what kind of business you are looking for, and most importantly, HOW MUCH will you compensate them for finding you a lead, and/or a customer.
But before you expect a current client to do that, you need to test their NPS (Net Promoter Score). After having some sort of "proof" with the client about your value proposition (in my case, after I bring in 10 leads and they make 3 sales or something like that), you should send them a really quick survey asking them how they would rate your service and how likely they are to recommend you to others. If they respond positively, email (or better yet call or sit down with them) and ask them if they know any other people that might be in need of your services, tell them of your referral program and politely push them to help you get in contact with the new prospect.
Hope that helped.
Many years ago, I listened to a training session done by someone who has speaking to the top .1% of all sales people who worked for the former Merrill Lynch. One tenth of one percent! He asked this question, "If I told you I could increase your business by 10% and it would only take 6 seconds in each call, would you do it?" You heard an audible murmur from the audience. These were extremely successful sales people being told they could do better and it would take a trivial amount of time in each call. He pointed to someone in the audience and said, "Time me." And then said, "Is there anyone else you know who I can be helping." You don't ask sit around referring your doctor or lawyer. You need to continuously plant the seed for referrals.
You've received some good help here, already, so I won't repeat all of that. Instead, I'll highlight one of the very simple but crucial things you can do, and that's to help the client you are depending on tell your story in the right way. The longer they have been your client, the less likely they will introduce you properly. That's because they may have you in a box that you've long ago busted out of. I think you know what I mean, too.
Picture a lead coming in by email, and you set up a phone call to explore the relationship. Somewhere in the call you'll ask, "Hey, how did you hear about us?" What they say next will make your heart sink or soar, because you'll immediately know--based on who introduced you--what impressions they already have. You're quick, or cheap, or fun to work with, or a great problem solver, etc.
So don't take that for granted--it's not just getting them to introduce you, but feeding them the right story to tell so that you're far down the road of being positioned appropriately.