Making Customers your Sales Force

What is the least expensive and often most effective form of advertising? Word-of-Mouth referrals. These are referrals from clients and customers who are very familiar with your product or service, because they have had recent experience with your organization. How can you maximize these opportunities to have your clients and customers refer new business to you? 

First and foremost, do your job well. If you are selling a product, make sure that you are selling a high-quality product at a relatively low cost compared to your competitors. If you are selling your product at a significantly higher cost than your competitors, make sure you have distinctly differentiated your product from your competition, to demonstrate its higher value. If you are selling a service, make sure you are responsive to your client or customer’s needs and specifications for that service. As long as it doesn’t cost you a lot of time or money, be willing to “go the extra mile” for your client and customer. This will build goodwill and will lead to your organization developing a good reputation. 

Once you have performed your service or provided a quality product, it’s now time to capitalize on that performance. One way to accomplish this is to thank your client and customer for their business and encourage them to “spread the word” about your service or products to their business associates and friends. Offer them a discount on a future purchase for providing a referral. If they feel awkward about this and feel that it may be a conflict of interest, offer the discount to their business associates and friends. 

Another technique is “taking the temperature” of your client or customer. Give your customer a follow-up call a week after a service has been provided or product delivered and, in the memorable words of former NYC Mayor Ed Koch, ask “How my doin?” This can be a double-edged sword which many business owners are afraid to use. What if my client or customer responds that I’m not doing well? What if we focus our customer’s attention on the fact that we simply did not provide the best product or service for their money? That should be a valuable lesson learned, because if you find this out sooner rather than later, you can take corrective action. If you find this out when it’s too late, you may not have a business left to take corrective action with. The time to ask your clients or customer’s for business referrals is when they are giving you positive feedback on your deliverables, maximizing the good will you’ve established. 

Once the sale is complete, don’t wait for your clients and customers to call you. Follow-up and occasionally contact them. Get to know their business and the trends within their business. Get to know them personally. Often a relationship built on a combination of professional and personal knowledge will sustain far beyond a relationship built simply on providing a satisfactory product or service. 

Another way to keep in touch is to send them a periodic newsletter which contains pertinent news, tips and other information that may help their business, or alert them to your presence and the fact that you care about their business. This newsletter doesn’t need to be costly to you, and in fact, can be sent via e-mail to your client/customer base as well as to prospective customers. 

Make the time to establish a network of professionals who routinely spread the word about your business within their sphere of influence. Make sure this network knows enough about your business’ strengths and qualifications to be informative and convincing to others. Beyond this group of professionals, I would highly recommend that you join a networking group. This group may be affiliated with a local or regional business association or chamber of commerce, or be privately operated. 

I co-founded a networking group in 2000 which consisted of professionals who were non-competitive with one another. That is, they would market their services within the group and perhaps cross paths in about 10 to 15% of their business with another member of the group. In these cases, we made sure the two competing businesses carved out and agreed on specific areas to market within the group. This networking group expanded from the founding 10 members to over 30 members in just two years, and is still thriving. 

Building a referral network is a terrific way to expand your business, and costs practically nothing other than your time and effort. It’s worth the time and effort to build.

–Michael Herz, CPA, MBA