Importance of Business Referrals

By: Network Lead Exchange

The Business of Referrals with Network Lead Exchange

Every business seeks to get more business and it is cliché when businesses ask customers to refer their services to others. However, those dismissing referrals as cliché don’t understand the power referrals have. Dismissing the idea of referrals is dismissing the cheapest, easiest way to acquire and retain customers. Between paying next to nothing and the credibility given to your business, getting referrals is critical to expanding your business. Network Lead Exchange works with business leaders to develop referral systems. These systems add value to referrals beyond just being new leads.

Why Referrals Matter

There is no substitute for word of mouth marketing. In sales, it is called the “Rule of 3.” A customer will tell three people about the experience, and those three people will tell three people each. The tree from the initial referral will grow. With two degrees of separation from the initial customer, this means a business would have, in an ideal world, up to 36 new leads. Of course, the actual numbers don’t bear that out, but if your business gets just a quarter of those 36 potential leads coming through the door, that’s nine leads you otherwise didn’t have. For a long time, the Rule of 3 governed sales practices and reinforced the value of proper customer service. Like everything else in our world, the internet changed it.

The Rule of 3 is now obsolete thanks to the internet. Just think about buying items on Amazon. The first thing people do is read reviews. In essence, these reviews are referrals. Today’s customers are more informed about products long before they interact with a company. Customers requiring more information about companies necessitate strong referral programs. The good news is there are several motivators any business can leverage to improve referrals. Network Lead Exchange understands these motivators and assists you with creating a referral network. Here are some methods used.

The Ego Boost

People love to be proven right and your business use human nature to improve its referral-based business. Satisfied customers will recommend your business to their friends and family if you ask them to. If you add a promotion to the referral, your cause is even more effective. The simple act of asking for a referral goes a long way. People love to feel important and asking for someone’s help is a great way to make them feel indispensable. Folks often go the extra mile, all you need to do is ask, and Network Lead Exchange’s system makes asking as easy as swiping on your phone.

The Reinforcement Mechanism

Another reason referrals matter is they help retain initial customers. Businesses are wise to pick low hanging fruit whenever its presented. This allows businesses to have strong earnings thanks to repeated business of their most loyal customers. One way to build customer loyalty is asking your customers for referrals. It is their opportunity to verbalize why they’ve chosen your business for a product or service. This active thought process about your business reinforces why they chose your business. The reinforcement spurs them to work with you again, and through repeated positive engagements, your business earns greater loyalty.

How you serve the people referred matters too. The customer referring your business will find out if you satisfied the referred customer. Therefore, going the extra mile validates your initial customer. This is a very simple way to keep earning that business, and Network Lead Exchange can show you how to track referrals so you can hone in on creating a dynamic referral network.

Building Expectations

A core idea of every business is to under-promise and over-deliver. That said, who wants to do business with someone they don’t expect much of? Referrals build up expectations for your business. Many people don’t enjoy parting with their money, so if you get them excited to spend money, you’ve wildly succeeded. However, the rub is you must live up to expectations. This is why a core value for every business is to say when you mean and mean what you say.

Think about the reputation of cable companies and service calls. There was a great Seinfeld episode where Kramer kept evading the cable guy and took great pleasure in the technician’s frustration. Everyone relates to that experience. As a rule, we don’t expect the cable guy to show up on time. Cable companies spend lots of time and money building infrastructure for service call windows and alert systems to let people know how much longer they have to wait. Even with these measures, ask yourself – do you expect the cable guy to show up on time?

Your business should never be met with this type of skepticism, and having a referral build up expectations is actually quite beneficial. For example, when someone visits Nordstrom’s, there are very high expectations for service. This reputation has been cultivated through referrals and repeating the process with every customer. Your business will do the same with referrals, and Network Lead Exchange will help you get there.

Managing Referral Networks with Network Lead Exchange

As you build a referral network, you’ll quickly discover how unwieldy it can get. There is a solution, and that is Network Lead Exchange. Network Lead Exchange is more than just a virtual rolodex. Using Network Lead Exchange allows your business to manage your referral network as granularly as you’d like. It allows for flexibility in meetings and when you can send or receive a referral. It can be done anywhere, at any time and doesn’t take long at all.

Learn the value of referrals by seeing how Network Lead Exchange supercharges this revenue stream for your business.

Get started with the most innovative way of networking when you stop by @ NETWORKLEADEXCHANGE.COM