What Are Business Referrals?

by Admin
What Are Business Referrals

“To be trusted is a greater compliment than being loved-” George Macdonald

This quote stands true not just personally but professionally too. Whether you are a small business or a huge corporation, building trusted relationships could really help step up your game when it comes to getting business referrals. In short, every business breathes on trust and relationships. If your customers don’t trust you, they won’t do business with you again and will hesitate to pass on referrals.

Studies suggest that customers acquired through referrals have a 37% higher retention rate and referred customers have an 18% lower churn than customers acquired by other means. Amazing, isn’t it?

Once you implement BNI’s proven referral system, you’ll start growing your business and getting some quality referrals. But what exactly is a business referral? Well, a business referral is nothing but a recommendation. When someone in your network recommends your business to a new prospect then a business referral is generated. While this may happen spontaneously during a random conversation, you can also make conscious referral generation or referral marketing efforts to grow your business.

What’s special about BNI’s referral system is that the referrals you receive are qualified. It’s not guaranteed business but the prospect is in the market for your product or services and has given permission to be called. It’s an opportunity to get in front of the prospect.

The three types of referrals you can generate are:

  • Direct or Word-of-mouth Referrals

Direct referrals are the most effective and the oldest form of business referrals. It has been in the picture since companies came into existence. They are a cost-effective and powerful way to advertise your business. In BNI, direct or word-of-mouth referrals maximize your opportunities to cultivate networking relationships and grow your business.

Studies suggest that a word-of-mouth impression drives 5x more sales than a paid impression. Customers acquired through word-of-mouth referrals spend 2x more and make 2x as many referrals themselves. A great way to integrate these referrals into your business is by exceeding the expectations of your current clientele and gaining customer loyalty. Once they see how good your product or service is firsthand, your customers and business partners will be happy to recommend you to their network!

  • Social Sharing

The power of social media is incredible. You must have seen a number of posts on LinkedIn or Facebook where people talk about how a particular brand helped them or vice versa. Social media channels allow you to see and contribute to the conversations surrounding a brand. It’s a great place to build and nurture relationships with prospects and pitch your business to future clients.

Give your customers a reason to talk about your brand and ask them to share their experience on social media. You’ll automatically see some social media referrals coming your way!

  • Online Reviews & Testimonials

Your customers are talking online – good or bad is secondary, but they’re talking. Online reviews and testimonials play an important role in your visibility and establishing a reputation of trust.

At BNI, we have a very interesting take on testimonials. It is fundamental to chapter meetings and a good testimonial is about one other member. The member goes into detail about how good the fellow member is, ways he or she has helped him and so on.

Research shows that 93% of customers read online reviews before buying a product. For every one star that a business gets, there is approximately 5-9% increase in revenue. To get online reviews, ask your customers to rate your business online if they’re happy with your service. In case you receive negative reviews, respond to your customer’s problem. This increases your likelihood of retaining the customer and leaves a good impression on prospects who are researching your brand online.

In the end, the key to getting quality business referrals is building strong relationships. This will reduce your sales expenses and sales cycle, build a group of satisfied customers and increase your sales revenue, so start making these connections today.

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