Word to the wise

Are you receiving as many referrals as you should be? Shannon Curtis, from Profitable Clothing Retailer, shares his secrets for maximising referrals.

Ask any retailer about referrals and they will quickly tell you that they are an important part of everyday business, and that they could do with more of them. The difficult part for most retailers lies in knowing the best way to do this. The good news, is that it is relatively simple to generate referrals once you know how.
There really is no better new customer than a referral. The referred customer has less scepticism, is less price-resistant, more receptive, more easily sold to, more easily satisfied and less costly to attract than a customer that comes through traditional advertising.
To generate more referrals it is important to recognise the significant and dramatic effect they can have on your bottom line. Once you establish this you will find yourself paying greater attention to the small things that lead to more referrals. Ask yourself; "what impact would one additional referral per customer have on your businesses bottom line over a 12 month period"? Unfortunately most businesses take referrals for granted. Whatever number of referrals they get, they gratefully accept, yet they have no proactive plan for stimulating referrals.
Over Deliver
The first step to maximising referrals is that you have to 'earn' them. The great Walt Disney said "Do what you do so well that people can't resist telling others about you." It is not enough to simply satisfy customers, satisfied customers do not refer in any abundance. Only enthused, awe inspired customers refer in great abundance, if customers only get what they expect, that's not good enough.
Stay In Contact
To stimulate referrals from your existing customers you need to remind them that you are still around, have a great product and service and are happy to serve them. This helps build a relationship of trust and dramatically increases referrals. Keeping in contact with customers monthly either via mail, email, fax or phone goes a long way to achieving this.
Give Recognition & Appreciation
Understand that the person who refers once can and will refer many more people, many more times if motivated to do so. Research has found that it is possible for a customer to refer up to 52 other people to a business.
Once a customer or client has referred someone to your business then that source of referral should be worked like the goldmine that it is. To do this you need to focus on the giving of recognition and appreciation. Possibly a quick thank you note or telephone call at bare minimum. That should happen right away. Subsequently some type of thank you gift is usually appropriate and effective.
Referrals Process
A lot of people who teach you about getting referrals will tell you that if you nourish your relationship with your customer they'll give you referrals. That's not necessarily true. In many cases some retailer's very best customers don't give them any referrals at all, simply because they're busy and have a thousand other things on their mind.
The key to getting a consistent stream of referrals is to build the referral process into the transaction!
Look at your business from the outside in and come up with ways you can over deliver on expectations. Once established then build each of these new ideas into your business process. For example if you decide that you are going to send each customer a thank you card with a $10 gift certificate, ensure you have a software system such as ACT that automates and manages this task ensuring it happens all the time, every time.
When this starts to happen the referral process becomes systematic and when we have systems in our business, results become (1) predictable, (2) consistent, and (3) repeatable. They are no longer left to chance, luck, word of mouth or good fortune.