The Art of Referral Conversion
Find a Consultant Become a Consultant

The Art of Referral Conversion

The Art of Referral Conversion

By John Jantsch

If you provide a product or service that delivers value and customers find the experience of obtaining those products or services is at least satisfactory, there’s a good chance you are receiving some quantity of leads by way of referral or word of mouth.

hannes.a.schwetz via Flickr

It’s a simple reality of business – if people need what you sell, they are more confident about purchasing it if they get a vote of approval from someone they already trust.

Most businesses realize this and put some energy into generating referral leads, but my belief is that firms that also put energy into act of converting referral leads can dramatically amplify the power of referral.

The funny thing about this is that the more referrals you convert to customers the more referrals you’ll receive from customers.

Below are the elements of the system you must put in place in order to convert more referrals to customers.

A special lead

A referred lead is different than a lead that found you online and moved through your education system. Some folks make the mistake of lumping referrals in with every other lead in the sales funnel. I believe that you owe it to your referral source to make big deal about the fact that this lead was referred. Go out of your way to let them know they are special. Acknowledge the fact that you are going to honor the referral by giving them access to something special, invite them to a unique event or assign them to your referral specialist.

The impact of this step is two-fold. First, the lead is different and likely does need some special handling to become a customer. And, imagine the message this treatment sends when they consider referring their friends at some point.

Close the cycle

The dangerous assumption some people make about referred leads is that they have done all their research, are ready to buy, and understand how you work. The problem with thinking is that in some cases they don’t even know they need what you offer. In some cases their friend recognizes they need your help, before they do and this calls for special handling.

Now, there certainly are instances in which a referred lead shows up at your door ready to buy, but you should have a process that allow you to discover where your lead is in their thinking and motivation and employ one of several education tracks to gently bring them up to speed on how you work, why you charge a premium and how they will receive the most value from becoming your customer.

Appreciate and communicate

The final step in effectively receiving leads is to develop a way to shower appreciation on your lead sources. If you make some sort of offer to incentivize referral sources you certainly need to honor that, but I find that a little token of appreciation such as a handwritten thank you, flowers or fruit goes a long way towards letting them know you appreciate the effort and support.

In addition to simply thanking your sources, you should also develop a path of communication that helps them know the impact their referrals have on your business and on those that they refer. If your referral sources learn that many of the leads they send your way enjoy the process so much that they become customers, this fact alone will often motivate them to continue sending referrals.

If you’re already receiving a steady stream of referrals, focusing on improving your referral conversion rate by 5 or 10% could dramatically impact your bottom line.

Free eBook 
7 Steps to Scale Your Consulting Practice Without Adding Overhead

The Duct Tape Marketing Consultant Network has helped me to grow my business by over 40% in the last 12 months. ~ Michael Quinn - Michael Quinn Agency, Fargo, ND

2 Out-Of-The-Box Ways To Generate Referrals
Marketing Podcast with John Jantsch In this episode of the Duct Tape Marketing Podcast, I’m doing the final part of a five-episode solo show series where I’m covering one of my favorite topics: referrals. You can catch the first episode, second episode, third episode, and fourth episode of the Referral Generation series here. Key Takeaway: In this episode, I’m wrapping up […]
6 Simple Ways to Get Your Customers Talking
Word of mouth marketing is considered by many to be the most desired form of marketing. The trust, referrals, and overall brand-building buzz that’s garnered by customers spreading the good word to prospects are worth its weight in gold. Some products, services, and experiences naturally produce chatter, but there are certain things that any company […]

Subscribe to the Duct Tape Marketing Podcast

If you know your small business needs marketing, but don’t have the time or resources, look no further. The Duct Tape Marketing podcast covers everything from earning referrals to managing time and being more productive.