Building a Customer Referral Machine

A satisfied customer is your best advertising agent. How many times, have we read this statement? A happy and contented customer brings at least two more new to your door steps through word of mouth publicity. Potential of customer referrals have never been fully explored. This probably is the most underutilized promotion tool. Presently whatever information we try to track is predominantly unstructured. When a customer leaves business premises, the owner ask just in a matter of fact way about his or her knowledge of any acquaintances that would be requiring the services. The moment customer leaves, the information is lost as the same has not been captured.

The emphasis of a successful customer referral program is to collect the data from all the customers during the sales process in a structured format in the database. Once the data is received it is mined, warehoused and leads are obtained. Then customer referral sales teams on the basis of these leads through a scientifically devised software program try to zero in on to the potential customers. For growing your business, getting new customers is of utmost importance.

Presently there are many software applications like SAP and other customized CRM which have inbuilt modules on getting referrals. But not all organizations will be implementing CRMs. A small organization, with low turnover will find it difficult to deploy a CRM at its work place. The beauty of this promotion tool is not the technology or the computerization rather it is the reading of your customers’ mind and pulse. Even a car washer man offering quality services will win customers through word of mouth publicity. Small businesses which are operating in our nearby areas employ the referral program quite effectively. The quality of their service and products speaks for themselves.

But as the organization grows, it becomes imperative for these organizations to have a structured customer referral program in place. The three most important factors deciding success of a customer referral program are:

  • Database for capturing data in structured format.
  • Tracking leads and follow-ups with effective sales team for growing your business
  • Acknowledgment and rewards

Follow-ups are as important fro a successful customer referral program as sales leads. It is quite possible that customer may not respond positively with first sales lead. However if contacted against after a period of time, customer may respond positively and may give business.

There are three important steps in a referral program. They are:

  • Taking consent of customer for referral program. Politely explain the program to the customer and further explain how he or she can help his or her friends and relatives.
  • Handover a structured form to fill out. Form can be deposited the and there or can posted back based on self addressed envelopes and stamps.
  • It may so happen that customer may like to fill the form, even then explain the importance of customer referral program and the rewards it can bring.
  • Once a customer referral results in sale, the reward has to be paid promptly with a thank you acknowledgement. The referral does not end here. As a matter of fact the process only gets started and multiple chains starts forming leading to many a sales leads.

Getting referrals has only recently caught the attention of business leaders and its contribution in increasing sales turnover is being felt gradually. But still lot many efforts are required, so that this promotional tool can be effectively utilized.

Another factor which should be well understood in customer referral program is that an organization should never become slave of technology. Various web software and tools which are available today’s for aiding the sales process should not be used to control the sales process. Organization should instead keep the controls in their hand only. However, problem with automated system responses which are part of SAP or for that matter any CRM, is their tendency to get over the nerves of the customer. The business logic associated with any customer referral program has to be well understood. This would help us in understanding the customer and building rapport with customer. Getting referrals is an important step to getting new customers which help in growing your business.

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