What are referral services? This is a paid for service used by a business to either refer to them direct prospects that are actively seeking the company’s product or services, or that places them in an advantageous position within a closed market, per se, for that service or product. You pay a bit to have a service tell you who is looking for what you have. This can greatly increase your ROI over standard cold calling, and should be looked on as a tool to be used, not the only way to gather new clients.

Most of these services, especially those that supply non-exclusive leads, are useless. Leads lists that are purchased have usually gone through many calls by the competition before you get them, and you will usually for this reason, be unhappy with the prospecting results. Which is why choosing the correct type and kind of referral services for your company is of paramount importance.

Putting money towards something eventually might pay off, but it works quicker if you have basic data about your prospective referral service before you start.

Where do they get their leads? From their own marketing efforts, or from an amalgamation service (takes leads/info from lots of sources and puts them together in one searchable database, like Monster) or are the leads supplied in some other fashion? To how many of my competitors have these already been sold, or will be sold to? Does this service have some sort of return or duplicate policy? On what timeframe will you receive new, fresh leads from them? (Not necessarily the best choice having a service that supplies 200 fresh leads once every month if you have 5 salesmen to support with daily leads). Does this service give me thesupport I mahy need in other areas? (A client referral program for example..) Will their referral services be able to expand and grow to support more demand from me, as and when I need it? What are their current clients’ conversion ratio’s, for a similarly priced product or service as yours, when you are the referral services leads?

These questions may seem obvious, but too many people using a service seem to just fall asleep after they sign up. Decide on whether to use a service by asking this question – will I make more by using this? The same basics apply to whether or not the service is right – Will I get what I pay for and need from them?

As with the majority of decisions facing businesses today, it is necessary to weigh the costs of implementation before taking the plunge into something new. But there are some areas that are obviously worth their cost, and one definite program to always have is a referral program.

It is a known fact that if one person recommends you to another through word of mouth then the person referred is more likely to buy. A referral program similar, except a little more methodical. It is a strategy that allows your clients to recommend countless people to your business. Remember the Pareto Principal – you’ll get 80% of your business from 20% of your clients. It is impossible to know right off the bat which ones will give the most business.

If this is new to you, it’s worth running over the basics of a referral program. You must always make sure that your customers are happy – an unhappy client is not going to ever recommend you. When someone does recommend you, be sure to thank them. That little bit of recognition will have great meaning to a person. A simple form of ‘Thank You” is a great reward and most people will like to hear they are appreciated.

Be straightforward when you ask for referrals. It is part of people’s nature to not want to spend time on something other than their own immediate needs, so making it as simple as you can is a great idea. Implementing an idea as simple as this and using it often can have a tremendous effect on a company’s future growth.

A referral program should ensure that you get quality, actionable contacts to follow up on. This doesn’t mean that they must “buy now” but that at some future time they will change to active customers, if followed up on properly. With all programs, it’s necessary for you to make sure that it’s implemented correctly too. Referral programs offering whatever will work as well if most of your sales get done in person by your sales force, or in a retail store.

Keep things straightforward and simple until you have a great system, remember that what you do well may be specific to your company only. Run the program, if it works, great – if not, change what needs to be changed until you reach a formula that suits you and your company best.

With each referral program, you must remember that you want this to do one thing, very well. A referral letter is the “next best thing” to having a personal referral, without that person knowing who will be reading their letter. This can be as simple or complex as you require – as long as the basic message that you want to give is included, then having several is not a bad place to be in.

Every major website out there now has referral letters available to them, called testimonials. Here we have clients who have written in to give the thumbs up to the site or product – doesn’t sound like a miracle, does it? Way over 60% of purchasers have said that they 1) read user generated comments or testimonials and 2) that their decisions have being based on these writings or comments. So many companies spend lots of money on customer satisfaction programs and on client follow up.

With competition continuing to grow in all industries, it’s no wonder that it’s becoming so cut throat for programs such as this. Doing the little things has become so necessary that it’s worth mentioning them again briefly.

Always follow up with your clients and even your prospects to ensure the sales and delivery process goes perfectly and your clients will be highly satisfied. When you’re assured of their satisfaction, then ask for a referral – or ask for a referral letter, depending on the product or service you are offering.

In areas where your offerings are not in a wide demand setting that referral letters will be very important, as not everyone will know someone who specifically will want your product, but if they’re happy with your service, they will be more likely to give you a testimonial letter. Since testimonials can increase your business, it’s a strategy that should be company policy – to ask for a referral after any contact with a client.

Integrating these letters into a sales presentation is not always easy or needed, but having them on hand to allow prospects to review an honest assessment by a previous client of your product or service will go a long way to showing that your company holds its responsibilities highly and backs it up. Taking into consideration the effect the referral letter has on sales is not easy and it’s incredibly hard to find metrics to back it up, but it is a known fact that our opinions do affect others, however trivial they may seem to us at the time, and that this influence has a huge impact on every sales arena.