Marketing Q&A By Al Jabaly

Al Jabaly is a certified marketing and business consultant with over 20 years of small business experience. Email your questions to al@FloridaBA.org. All questions will be answered via e-mail. Some of the most interesting questions will be posted in this weekly column. For further information, Al can be reached at 1-888-899-3190

“AL, I GET FEW REFERRALS FROM MY SATISFIED CUSTOMERS. WHAT CAN I DO TO CHANGE THAT?”

Referrals are the best source of new business. I have always “extracted” referrals from my satisfied clients! You, like most business owners, depend on what I call the “prayer method” of getting referrals: you just pray that someone refers you! Being an experienced sales person and a closer, I live on referrals! Many companies, like ADT for whom I once worked, train you on how to get referrals immediately after signing up a prospect for a security system and while you are still in the home. In fact, ADT used to require that, for each appointment they set up for its salespeople, each one of them had to get at least one referral! What can you do to stimulate referrals? Plenty!

A) MOTIVATE THE CLIENT! This one I used extensively! I ran a carpet cleaning company in AZ called Mr. Steam. I designed a coupon, in the shape and size of a dollar bill, and called it Mr. Steam Dollars. Basically, it offered the person redeeming it special discounts on carpet cleaning. On the bottom right corner, there was space to be filled by the technician. Every carpet cleaning order form had a number and the technician was required to fill in that number in the blank space on at least 10 such Mr. Steam Dollars. He would then explain to the customers that all they had to do was to pass these to their friends and colleagues and that, for every one redeemed to us, we would pay them the higher of 10% or $5 of that job’s total invoice. Of course, not every one gave away their coupons, but some were more aggressive about it. They would ask us for 50-100 coupons, write their referral number themselves, and distribute these coupons everywhere. They knew that we would honor them and would mail them a check!

B) START A REFERRAL NETWORK! With Mr. Steam, I talked to other business owners who serviced homes, such as pest control, painters, plumbers, etc. and I invited one company per trade, 10 in total, who I knew did great work, and suggested we create a “referral network”. They agreed and we printed 10,000 magnetic post cards and on it were the names and phone numbers of 10 companies that serviced the home, one per trade. We were the only carpet cleaners on it. The card also entitled the home owner to 10% off. Each business received 1,000 such cards to give out to their clients to place on the fridge. The clients kept and used the cards whenever they needed such services! The 10 businesses shared the cost of the cards and also verbally gave referrals when asked for them!

C) ASK FOR REFERRALS AND PAY FOR THEM! I do not hesitate to ask a client who just signed up with me for a referral. I publish tourist maps now and, once the client orders an ad, pays and is happy about the order, I ask him/ her for a referral right away. If the client is in a business center, I ask for the names of other business owners in that center so I can go straight to them. My favorite method is to hold the check the client just wrote me and ask: “Do you want your money back!?” The client always asks:” What do you mean?” I then explain my 15% referral fee: “I pay 15% for every client that you refer to me who orders an ad. To get your check back, all I have to do is sell 6 ads. To sell 6, I will need 10-12 names. I am sure you know that many people in business. Can you give me now the names of 10-12 business owners that I will call and say you referred them?” Most of the time, they give me 2-3 names and ask me not to worry about paying them the 15% referral and that they are happy to help me out! If you do not ask for referrals, nobody is going to volunteer them to you!

D) CREATE REFERRAL AGENTS FOR YOUR SERVICE! With the Mr. Steam, I had 50 “referral agents” all over town referring my business! I bought 50 plastic stands from an office supply store and printed special Referral Coupons. They were titled: “We Use Mr. Steam!” I would then visit businesses that had carpets and I made a deal with them. I would clean their front reception when needed (once a month was average) if they would leave these referral coupon stands on their counter. Each coupon had a number pertaining to that business. I made monthly visits to each of these “Referral Agents”, thanked them for the referrals and refilled the plastic stand with fresh Referral Coupons. That referral method worked well for all the 3 parties involved: Mr. Steam, the business and their client!

You need to be creative and pro-active in seeking referrals, otherwise you will continue to pray for them!