Referrals


The most effective way for you to get quality new clients, bar none, is by referrals. I think there are two main reasons for this: referrals are given by people who trust you, in other words their recommendations have that all-important “Truth Factor.” Secondly, when many companies spend huge amounts on sales and marketing, referrals are normally free.

Some recent research has shown that across the board of all industries, two thirds of customers are willing to refer their suppliers but only 6% have been asked. This is because many business people feel uncomfortable asking for referrals, particularly professionals. However, a very good way to do so and one that will feel comfortable to almost everyone, is by using a system based on Net Promoter Score. This has the additional and highly valuable benefit of giving you extremely good customer feedback and is used extensively by the world’s most prominent brands.

The unique feature of Net Promoter Score (NPS) is that it revolves around one central question, “On a scale of 0-10, how likely are you to recommend us to a friend, colleague or business associate?”

To calculate your own Net Promoter Score you take the percentage of respondents who score you 9 and 10 (your promoters) and deduct the percentage who score you 0-6 (your detractors). The resulting figure is your Net Promoter Score. More than 50% is considered to be world class service. The latest Net Promoter Scores of major brands include Google 56%, Apple 71% and Amazon 76%. You can benchmark your customer service against these and other major brands as well as your own industry. It also gives you a great way to ask for referrals.

Those that score you 9 and 10 are clearly happy to refer you. With these people you can easily ask them how they can refer more people to you and wherever possible reciprocate by referring them as well.

With those that score you 7 and 8 you should ask them what you need to do for them to score you 9 or 10.

For people who score you 0-6 you need to react quickly and have an open and frank discussion about how you can improve your service to them. One of the biggest reasons that people change their suppliers is perceived indifference. In other words they think you don’t really care about them.  This is the opportunity to rectify that. After you have confronted their issues your relationship will normally be better than it has ever been before. Alternatively, they could be people who are never satisfied, in which case I advise you to stop working with them.

By Andrew Rhodes

 

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