Congratulations! You have launched your dream business. Your website is up and running, and you have set yourself up on your favorite social media channels. With a marketing budget in place, you might have run some online ads, or paid for some print marketing. And… you are still waiting for the phone to ring with that perfect stranger who is ready to place a million-dollar order for your goods and services. Sound familiar?
You’ve heard that networking is the answer to get business quickly, so you load up on business cards, and perfect your sales pitch. After carefully researching various groups, you sign up for a couple of meetings. You dress up in all your finery and descend on the networking meetings, and while making sure everyone there knows why you and your product/service are the best things since sliced bread, you generously force your business cards on everyone in your path, and yet … you still haven’t made a sale.
Self-doubt sets in, and you are considering throwing in the towel. In your depth of despair, horrors of horrors you start looking at ads for a “real” job. Before you do so, it’s time to reevaluate your marketing plan, your lead funnel, and your systems and processes to determine where improvements can be made.
Let’s start with marketing. Time to fine tune your audience and messaging. Chances are your product or service is available from other providers too. It exists because it solves a problem. It is important for you to fully understand the problem that your product or service solves, and how you can provide or deliver it better than anyone else. Another important aspect of marketing is to identify who the audience for your product or service is, and where they can be found. As an example, if it solves a problem for seniors, marketing on Instagram or Tik Tok is going to miss the mark. With your audience clearly defined, next is to ensure that your messaging resonates with your target audience. Ask a sample of your target audience, who you trust, for their honest feedback regarding your messaging—family members are probably not the best “audience” to ask for honest feedback.
Now that your audience has been defined, your messaging is on point, and you are meeting your audience where they are, it is time to build your lead funnel and your systems to convert leads into paying customers. Your lead funnel should accommodate leads and referrals and you should decide which of the two you are going to focus on. Let’s look at a couple of definitions for clarification.
A lead funnel is the process through which a potential customer becomes aware of your product, expresses interest, and then moves through your funnel to become a paying customer. Lead funnels can range from a few steps to a complex sequence of steps. Let’s examine a simple but effective 4 step funnel:
- Awareness: exposes your potential customer to the problem that your product or service can solve. It is their first introduction to you and your company. Content could include blog posts, videos, etc.
- Interest: during this stage, people are searching for more specific information. Make sure that you have plenty of information with searchable key words offering content such as ebooks, case studies, and whitepapers.
- Decision: potential clients choose specific products based on its key characteristics so make sure that you are providing everything to make that decision easier, such at customer reviews, pricing, photos.
- Action: once potential clients choose a product or service, they browse different online stores/providers searching for the best price. It is essential to make irresistible offers, demos, consultations and discounts to convert these leads into paying customers.
Potential customers may initiate communication with your brand at any stage of the lead funnel, so it is essential to provide relevant, quality content throughout the process, and multiple ways for them to contact you.
A lead is unqualified. A few other characteristics of leads:
- Leads are not necessarily a true opportunity for a sale.
- Leads are “cold” calls and are not expecting your call.
- Leads have no personal endorsement.
- The time and effort to weed through leads to find the few who might become a sale is considerable.
- Leads don’t come to you—instead, you chase after them.
- The ratio of leads to closed sales tends to be low.
A referral is pre-qualified. A few other characteristics of referrals:
- The person who is referred to you is typically in your target audience and has a need for the product or service you provide, to solve a problem they have.
- A referral comes with the “stamp of approval” from the referrer.
- A Nielsen study shows that 83% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products and services, making these the highest ranked source for trustworthiness.
- A call to a referral is a warmer call as they will already know who you are, and what you do—and in the best cases will be expecting your call.
- A referral is not a guarantee of a sale however the time and effort needed to convert a referral to a sale is considerably less.
- When you master the art of asking for referrals from previous clients you can develop a more reliable pipeline of future business.
- The ratio of closed sales to referrals is higher than that for leads.
Based on the above, it is obvious that referrals have a greater potential for resulting in closed sales than cold leads. However, leads are often necessary to grow your business.
Regardless of whether you are building your business working leads, or referrals, or a combination of both, the gold is in the follow up. Let’s examine best practices for working with both leads and referrals.
In 2016 The Harvard Business Review conducted a study:
Based on this study, leads will require consistent, persistent follow-up and nurturing. Now let’s examine how best to work with referrals.
When you need a product or service, would you rather read through hundreds of online reviews or would you rather purchase that item or hire that service provider that someone you know, like and trust refers to you? The latter tends to win hands down. Here are 5 ways to build a successful referral based business.
Give lots of Referrals BEFORE expecting referrals:
- When you provide an exemplary service to your customers, they will think of you, but may not remember you when opportunities for referrals present themselves.
- To remain top of mind, you need to become “Google” for your customers.
- Be the resource your customers, and sphere of influence know is looking out for them.
- This way, when you are top of mind and they hear of a need related to you, they will automatically pop into their head.
- This puts you on the same team, and repeat referrals become a reality.
Teach your Sphere of Influence, Raving Fans and Past Customers how to refer you:
- Start with your best customers because you want to work with other customers just like them.
- Educate them that your business is built on referrals.
- Ask your customers for their advice to make them feel involved in your success.
- Build relationships with them.
- Remind them to check in with their colleagues who might have similar problems to the ones your product or service addressed for them.
Focus on newer Customers:
- When you deliver a product or service that solves a particularly difficult problem for them, and with the best customer service they have ever experienced, they will want to tell others about you.
- You want to become the thing your clients can’t stop talking about.
Implement a VIP Program to thank your Referrers:
- Find out what their hobbies are, their favorite restaurant, their favorite store to shop, and reward them with a gift.
- This small investment in them provides them an incentive to refer again.
Provide tools that make it easier for referrers to refer you:
- Give your sphere of influence, your raving fans and your past customers something useful, something they can’t get anywhere else.
- Something like an info sheet, or an authoritative guide which is not available on your website.
- Ask if they would be willing to place this item where other potential customers will see it.
- This is a great non-threatening, passive way for your customers to share your products and services with others.
The majority of successful businesses are built on repeat and referral business. It is worth your time to invest the time and resources it takes to develop the relationships which will result in this more sustainable business growth model. Don’t delay, start today!