Last Updated on July 20, 2020 by Carolyn McRae
Ah, referrals.
Marketing gold for companies of all shapes and sizes.
When a client makes a referral, the profitability of the relationship increases, and so does the clients LTV (lifetime value).
But referrals are tricky. In a perfect world, clients who love you and trust you would feel implicitly compelled to praise your services at every cocktail party they attend. And sometimes that does happen (another reason why nurturing relationships year round is key). More often, however, you’ll need to be a bit more direct with referral requests.
Startups get this. Beyond asking for referrals, startups INSPIRE their audience to refer. They’ve found referral strategies that work, without adding unnecessary time to your schedule. (If anyone understands the value of time-saving strategies, it’s small startups!)
How do they do it, and how can you follow their lead?
How Today’s Best Startups Inspire Referrals
The Win-Win
The Win-Win is a hugely effective referral tactic.
Consider Plated, a startup that delivers chef-inspired recipes and locally-sourced ingredients to customers who want to cook gourmet meals (cofounders pictured above). Once customers join, they get a special referral link that Plated asks them to share with friends. It’s a double incentive” the friend who signs up gets the first two meals free and the existing customer gets a bonus of two meals credited to their account.
You can adopt a similar strategy. It could be straightforward – perhaps you give the referring client a small discount on services and offer the potential client a free initial report. Or get creative! When a new client signs on, the referring client gets to join them for some awesome experience, like a cooking class or wine tasting event (with you footing the bill, of course).
Choose Your Moment
Successful startup marketers know how to choose the right moments for referrals. The best time to ask customers to sing your praises is when they’re closest to the brand. For an online retailer like Rue La La, that means giving customers the chance to tell their friends about a sale the moment after their own purchase is complete.
For financial advisors, that means being strategic about when you ask your clients for referrals. Maybe you just helped a client grasp a new concept, or made an awesome move that your client is fawning over, or showed them the super awesome features in Blueleaf’s client portal. Don’t wait; that’s your time to swoop in and make the ask.
Make it Easy
Asking for a referral is great, but giving clients a clear next step for taking action is even better. Just ask The Startup Institute, a career accelerator that prepares their “students” of all ages to work and thrive at startups. In order to get qualified students to apply to the program each season, The Startup Institute reaches out to its network of alumni and provides them with pre-written tweets, emails, and Facebook posts that they can use to spread the word. They’ve made it incredibly easy for happy customers to send referrals.
Don’t leave clients wondering how to refer you. Give them clear next steps. Maybe you host a panel event, and ask clients to bring a +1 who might be interested in learning more about your services. You can also create an email template that they can easily adapt to send to their contacts. Better yet, give them a list of the type of other professional service providers you’d love to meet, and ask them to make an introduction.
— Brief excerpt from: How To Grow Like Today’s Hot Startups. Download a full copy here.
