Increasing Business BIGTIME with a Successful Referral System
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What I’ve discovered from most of my small business clients is that most would prefer to build their business through referrals rather than through direct mail, advertising in newspapers, radio, TV.However, most leave the referrals to a somewhat chaotic, unplanned approach. When they have a repeatable system of going after referrals their business growth suddenly explodes.
Let’s look at something. Most of my clients find I emphasize the importance of having a measurable, repeatable, “system,” a step-by-step plan that can be duplicated over and over and know EXACTLY how many new customers, or repeat customers, we will get every time we do it the same way. And, we also know, that if we tweak the system slightly how much improvement we got from the last time. In other words, we are in control and know what to expect. We even know exactly how many customers we'll grow from week to week.
On one hand we know how many new clients walk through the door when we market through direct mail, or when we advertise in the newspaper. And on the other we should know how many people we’ll get from asking for referrals. And I’ve found that my sales close ratio is even higher when I have a referral, sometimes almost 2 times higher, so having a “system” for getting referrals rather than leaving it to chance is one of the greatest things you can do for your business.
Here is a way for you to develop a system of highly effective referrals.
First, ask yourself,
o How much are you willing to pay to acquire a customer?
o How much CAN you pay?
o How much is a customer worth on one purchase?
o How much is a customer worth to you over an entire year?
o What is the lifetime value of a customer to you (in other words, knowing that a customer will likely come back for 3 or 4 years, how much total revenue he will generate, and how much profit he will generate allows you to understand how much you can pay to acquire new clients and still make a profit.
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