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John Jantsch

Founder of Duct Tape Marketing

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Get More Referrals with This Simple System

September 27, 2016

Referrals are the lifeblood of any business, but they can be difficult to track. Here are some tips to help you understand why your customers are coming to you.

Referrals are the lifeblood of any business looking to sustain success and grow. You must rely on making your customers happy enough to refer you to bring more business in. But referrals can be difficult to earn and sometimes even more difficult to track.

However, by tracking referrals, you can analyze key sources of business. At the very least, you can thank the source, and you may even be able to create other referral sources based on the information you collect. The key is to install a process or system of earning referrals, particularly one that keeps tracking in mind from the start.

Install a Referral System

To install a referral system, all you have to do is create and consistently execute a procedure to earn a referral from every customer. First things first, though; you want your business to be more referable.

Begin by breaking down the typical customer interaction. Is there a touchpoint that could be made more smooth for the customer? I believe most customers want to refer your business. Rather than earning a referral, most businesses somehow lose the referral along the way.

Next, you want to ask your customers who is referring you. Send a quick survey, using a tool like Delighted, to find out which of your customers are referring you and what they have in common. 

Once you know who these people are, you can find something they value. Offer it as an incentive for a referral. Make sure the incentive can be tracked in order to be earned, which is something like asking, in person, those referred to your business to name their connection. It will make tracking much easier in the end. 

Finally, you'll want to make sure you follow up with your sources, either to deliver the incentive or just to say “thank you.” You don't want the first referral from a customer to be your last.

Collect and Track Referrals

The key to tracking referrals is to use existing tools that can help you track who is promoting your business. 

Create processes that involve customer reviews, project reviews, and satisfaction surveys, and use these as triggers for referral collection. You might just find that it's a great way to really find out what a great/lousy job you are doing and course correct accordingly.

With the collection of these items--even online reviews--you know who is referring you and why. 

Just as not all referrals are created equal, not all motivations are created equal. You must have multiple referral opportunities going at all times. For instance, people may not want to set up an account on Yelp just to earn 10 percent off their next purchase. You must be willing to collect referrals from a variety of sources.

The tracking for referrals all comes down to your initiative. If you are offering bonuses for online reviews, for instance, you must regularly check up on the review sites. For word-of-mouth reviews, you must ask the customer whether or not they were referred, and track it. If you're thinking "how many sales this month were a result of referrals?" it's already too late.

This article originally appeared on Inc.

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