Set up a word-of-mouth system to generate a steady flow of leads

All businesses need leads – they are your lifeblood. You must consistently build your list of prospects and introduce yourself and your company to new potential clients and opportunities. The ability to generate a regular flow of qualified leads is the hallmark of a successful business. And referrals are the least costly and most effective way to generate those leads.

Referrals leverage other people’s contacts and relationships, they speed up your sales cycle and, done right, a good referral program can all but eliminate the need to cold call. Referrals are the best kind of leads because they are warm. They likely already have a need for your service, and are at least partly sold on doing business with you. You don’t have to buy ads or do other marketing to get their attention. With a referral, you’ve been blessed by a transfer of trust.

Now, these are simple things that everyone in business already knows. They know the value of referrals, but unfortunately many don’t have a system for generating them. Referrals are too valuable to leave to chance. You need a proactive referral program. You need specific strategies aimed directly at generating referrals from every customer. You need to become a true referral-based business.

Here are seven steps to get you on the fast track to becoming a referral-based business:

1. Develop a referral mindset. This is simply a conscious decision to actively use referrals to build your business. It means having a clear understanding of the importance of referrals. It means developing a new attitude towards your business, the clients you serve and how you serve them – a referral attitude.

2. Become referable. You don’t get referrals, you EARN them. You have to become a business that merits being referred. Scrutinize every client interaction to identify all the areas that need improving, and make the commitment to do whatever it takes to improve. You want to over-deliver and exceed customer expectations .

3. Set the referral expectation. Now that you know that you have earned the right to referrals, make them part of the transaction. Have a referral agreement with your customers. I’m not saying you need a signed contract, simply that you let them know early in the relationship that a) you are a referral-based business and b) that most of your customers have such a great experience that they are more than happy to introduce friends and colleagues to your business.

4. Ask for the referral. At some point you have to ask. When you ask depends entirely on your particular situation; just be absolutely sure you have done enough until that point to have earned the right to ask. You have set it up by letting them know in advance that this is how you build your business. Now, just ask. Ask politely, positively, confidently and expectantly. Simply remind them of your earlier conversation about referrals and ask if there is anyone they can introduce you to who might also benefit from your service.

5. Help them help you. Explain the unknown. Walk your referral source through the steps you will take the lead through and how you can assure the best possible service and the most respectful and professional experience. Help them understand what kind of leads you want and give them tools – something about your business they can hand out to the people they refer you to.

6. Follow up. Just like any lead, a referral needs to be followed up, nurtured and brought along through your selling system. Also, follow up with and always thank the person who gives you the referral. Let them know how things are going with their lead.

7. Turn it into a system. Document what you do so you can develop a system and process that you will consistently use and work the same way every time. How do you ask? When do you ask? What do you leave behind? How do you follow up? How do you track the referral? How do you thank the referral source? What information do you capture and how do you use it?

Follow those seven steps and you’ll soon be reaping the rewards of having a successful, referral-based business.