Will Your Customer Refer You?

The number one source of new customers is word-of-mouth referrals. Some businesses operate purely on referral systems and never have the need to pay for advertising and standard marketing materials. I meet companies all the time that do not have brochures and never need to do direct mailings or cold calls because of their well established referral base. Let’s examine how you can boost your word-of-mouth referral opportunities.

A key question to ask yourself is: Would you refer your family or close friends to do business with your company? If you cannot immediately respond with a “Yes”, there are looming questions about how your business operates and how those operations affect your customers. It takes a higher level of commitment to recommend your family and friends because you will have to answer to your family or friends if an issue arises. Family and friend referrals tie you in personally to the business services being offered. As a referral source, you also do not want to see anything happen to your family or friends that would cause grief or harm to them or your relationship.

Here are the main areas your organization could make improvements in if you want to increase your word-of-mouth referral rates.

Managing Customer Expectations. Whether you realize it or not, your company sets customer expectations. If you have not provided clear expectations, the customer is left with confusion and dissatisfaction. If your company sets expectations for the customer and fails to meet those expectations, the customer will be dissatisfied. The most effective way to manage expectations is to first measure the performance of your organizational processes. You need to know how long it takes a customer to get from point A to B to C, and so on.

How long does it take a customer:

to accomplish their goal with the company?

to reach a person within the company?

to reach the right person within the company?

to complete their transaction with the company?

to receive the final product or service from the company?

Your goal in managing expectations is to be proactive in quickly accepting the customer through whatever means they contact you and communicating the step-by-step process with appropriate time frames. It should always be a top priority of a business to exceed these expectations in situations where exceeding expectations would not be a burden to the customer. For example: if you communicate to a customer that someone will call them Monday at 10:15am and your staff calls Monday at 9:45am, the customer may not be available and may miss the communication. However, if your staff calls at 10:45 am the customer will be dissatisfied.

Communication. Beyond clearly communicating managed customer expectations, a business will also want to communicate through follow-ups, newsletters, mailings,etc. Communication is the best way to build a lasting relationship with your customer and keep your business top of mind. If you are not communicating on a regular basis with your customer, there is no loyalty and it is easy for competitors to steal them away.

Customer Service. Interaction with your organization should always be inviting and friendly. The customer is always right or they are not your customer. When is the last time your employees received training in customer service and handling difficult customers? Going above and beyond in customer service will create a lasting relationship and will keep your customers coming back.

Without realizing it, some companies turn customers away at the very beginning because of poor customer service. In healthcare, patients are lost in the first contact when provider offices start off the conversation questioning insurance and coverage. In general business, customers are often lost due to not receiving quick response to voicemails, long wait times before reaching a person, and multiple phone transfers. Every person the customer “touches” needs to have the resources and training to provide superb customer service.

Value Beyond the Product or Service. A customer is more likely to refer your company to family and friends if they feel they have received a value greater than expected and promised. This value could be through customer service, education, awareness of other beneficial services or services that may be needed in the future, discounts specialized for the customer, meeting last minute requests, and providing assistance in other areas to help the customer meet their goal.

Consistency. In all that your company does for a customer, consistency is key. Your organization will need to provide clear expectations, communication, customer service, and value time and time again. If a customer can rely upon your business, you have created a relationship where you make the customer’s life easier and the customer depends on your services or products.

To discover areas that need improvement, try mystery shopping your own organization or having someone you know mystery shop. If you do the mystery shopping, you must be able to approach the situation as a consumer and not as a member of the company as it is too easy to justify poor interactions. Any poor interaction deserves an internal examination and response. The customer does not know your company’s procedures and it is unlikely that they care. In fact, if your company makes excuses to justify how the customer feels, you have already become unreliable in the customer’s mind.

Achieving in all of these areas takes a massive amount of thought, planning and action, but you will reap the greatest rewards. If customers know what to expect, enjoy interacting with your company, receive greater value than a simple transaction and see consistency in your efforts, they will become your advocate. A happy customer tells everyone they know. An unhappy customer tells everyone they know. You have the potential to reach thousands of people through a happy or unhappy customer. Happy customers bring in referrals, unhappy customers keep people away.


April Salsbury, MBA is a strategist, an analyst, an operational guru, a recognized leader and C-suite global healthcare executive with drive and focus for competitive markets. Co-host of The Business Forum Show and regular contributor to various business journals, she possess multi-functional and multi-national competencies with more than 15 years experience in business and healthcare. Her expertise is in invigorating revenue growth and infusing value of lean practices in growing companies through improvements to cash flow and operations management.

Fueling revenue, growth and profit, Salsbury & Co. is a consultancy firm focused on helping businesses and healthcare organizations achieve excellency. Our specialists have executive experience combined with deep functional expertise to provide our clients with services that drive real impact and results.

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