When you’re starting your small business and also in the first several years, customer referrals are a powerful way to build business. Referrals that you get for your business aren’t always what you might think, though.
People don’t refer customers to you just because. There are two major reasons why someone might refer a customer to you and it’s not always because they’ve done business with you and like what you did.
New customer referrals make up a huge part of most small businesses customers. That doesn’t mean you just need to network and tell your current customers to recommend you, though. You need to build trust with current customers and others inside your target audience.
Building trust and getting referrals means having a strong brand, too. That means your website does matter, your social media presence does matter, and other online presence’s also matter. Even with a referral people will do research into your business. That means you want to be sure you’ve done the work to make a good impression.
Building trust with those referred to your business is vital to guaranteeing your referral will close.Trust with customer helps make it easier for you to close the deal. Click To Tweet
The following are the two major ways a your small business could get referrals:
- A previous customer refers a new customer to you.
- Someone who trusts your ability (but isn’t a customer) refers a new customer to you.
When you’re starting your small business and don’t have a lot of customers, number two will be your primary source for customer referrals. You have to start somewhere and building trust is the best way.
Starting with previous customers, they’re going to refer others to you if they had a good experience.
When you start growing your customer base, you’re probably going to get repeat customers and referrals. Those customers referred to you are easier to complete a sale but the sale still requires a strong brand. Not only is a referral dependent on past customers but the referral quality can vary greatly.
Having a strong brand online for your business is necessary even for a referral because a referral will still do their own research. Improving your chances of turning a referral into a customer requires a good plan for your business online.Make sure you have a plan to close the deal once you get a referral to your business. Click To Tweet
Relying on one stream of referrals is a mistake. Venturing out and drawing business from as many streams as possible will help your business grow faster and more reliably. That means any downturn in business overall, you’ll weather better than others who haven’t prepared.
If you’re just starting out in your small business, you probably won’t have a lot of previous customer referrals. That’s okay, though, because there is another type of referral that you can build over time for your small business.
The other type of customer referral comes through building trust with people who know other people you could do business with.
Making connections and building trust shouldn’t take place only with people you want to do business with. Building trust should also happen with those who are in your target audience but not looking to purchase now.
Those who are in your target audience likely know others who are in your target audience. Building trust with people in your target audience will help position you as an expert in your field.
While others are busy trying to go after their customers directly and selling them something, you can slip in through the back door. While they’re busy selling (and failing), you should be busy building trust and getting referrals from people you haven’t even done business with.
There are a lot of activities you could be doing for your small business to help build trust with your target audience. You could be:
- Active on social media
- Creating videos
- Putting out infographics
- Writing whitepapers
- Putting together case studies
Of course this list could go on with ways you can create helpful content that builds relationships and trust. Tapping into referrals from people you haven’t done business with yet is a powerful source for business.
These are people who read your content, follow you on social media and all around love what you do. If you have a free service level, they may use it, love it, and refer others to your paid service.
There are several companies I’ve followed and used their free service for many years. I never paid them money but I referred several customers to them. Over time I eventually did become a customer so the company got referrals and business.
Even if someone hasn’t done business with you doesn’t mean they aren’t a valuable relationship for your business. Champions love what you do, they trust what you do. If one of your champions runs across someone who could use your type of service, they will refer a new customer to you.Champions love what you do. Treat them well and you'll get multiple referrals. Click To Tweet
That is a powerful referral because the person has to know your business and trust you a great deal to refer someone to you without even using your service yet.
That’s a champion.
If you can get champions of your business on your side then you can build a good stream of future customers.
Two Business Sources
These two methods for building your customer base will help your small business grow. One will help you in the early days, the other will help you as you get more customers.
Having a presence online will help you grow both referral sources mentioned in this article. Not only will a strong business presence online help them grow, but they’ll help transition a referral into a customer.
If you’d like to get an outside view on your online brand to either make sure you’re on the right track or give you ideas to grow it, get an online brand review and report. The report will help give you ideas you can immediately execute to grow your business and increase the chance of getting customer referrals.
One place you know you’re going to reach your champions and grow your referral options is an email list. If you don’t have a website, that’s okay, you can grow your email list without one and stay connected with your business champions.