You’ve worked hard to build your business and cultivate strong, loyal client relationships. Now it’s time to leverage those connections to generate new leads and grow your company. Referrals from happy clients are among the most effective ways to get new high-quality leads.

But asking for referrals can be easier said than done. Many small business owners feel embarrassed to ask customers to refer them to their networks. One step to take is to make it easy for people to spread the word about your services. This way, you won’t worry that you’re asking them to invest too much time and energy, and your connections will be more likely to agree.

In this article, you’ll discover proven ways to ask your clients for referrals in a genuine, non-pushy manner. You’ll also learn how to set up systems to capture those referrals and turn them into new business, using tools like booking software, lead forms, and email campaigns. When you set up the process in an organized way, you’ll discover just how much you can achieve through the power of referrals.

Why referrals are critical for small business growth

Referrals are the lifeblood of your business

65% of new business comes from referrals

As a small business owner, referrals should be your top priority for growth. Why? Referred customers tend to be more loyal and satisfied than those from other lead sources. In fact, up to 65% of new business comes from referrals, and referred customers are 18% more likely to stick around.

Referrals generate the most valuable leads because:

  • They come pre-sold on your business. Your clients have already raved about you, so these leads are more eager to buy.
  • They have higher lifetime value. Referral leads tend to spend 13% more overall, and bring a 16% increase in customer lifetime value (CLV).
  • The Client Acquisition Cost (CAC) is lower, since you didn’t have to pay for ads or lead generation, which means higher profits.

Client referrals can be a smooth system

The best part is, your clients want to refer you. But you need to set up a client referral program that lets them know you’d welcome referrals, makes those referrals easy to complete, and ensures that you make the most of their efforts.

For a start, let your clients know you appreciate them and would welcome referrals to similar businesses or friends. It helps to provide them with resources like business cards, flyers, or email templates, to make it easy to spread the word. You can even offer an incentive, like a bring-a-friend discount, but often the opportunity to help a business they believe in is reward enough.

When the referrals start rolling in, be ready to capture them. Use tools like lead management software, online booking, and marketing automation to effectively capture, nurture, and convert these valuable leads into happy, long-term clients.

Then ask your new clients to recommend more potential customers, because  referrals are the gift that keeps on giving.

The right way to ask for referrals

Referrals are the lifeblood of any small business, so don’t be shy about asking your happy clients for them. Here’s the best way to make the ask:

  • Express your gratitude for their positive feedback and loyalty, before you mention that you’re always looking for more people who could benefit from your services.
  • Be direct. Ask if they know anyone else who might need your products or services. Explain that referrals have a huge impact on growing your business and allowing you to assist more clients.
  • Provide incentives, like discounts or freebies when they refer someone who becomes a new customer. This shows your appreciation and gives them an extra reason to spread the word about your company.
  • Make it easy for people to refer you by giving them business cards, flyers, or email templates they can pass along. You should write promotional social media posts that make it simple for others to tag or share with their friends and followers.

3 ways to ask clients for referrals

Asking for referrals from happy clients is one of the best ways to grow your business. The key is making your request in an enthusiastic and personal way. Here are 3 methods for asking for referrals that produce results.

  • A personal phone call

Nothing beats the personal touch of a phone call. Hearing the enthusiasm in your voice will make your clients excited to spread the word, so pick up the phone and call your top clients. Start by letting them know how much you’ve appreciated their business. Mention a few specific ways that you think you’ve been able to help them, then ask if they’d feel comfortable referring your services to others. It can help to offer an incentive, like a discount or gift card for any new clients they send your way.

  • A handwritten note

In our digital age, a handwritten note really stands out. Send a heartfelt thank-you card to your best clients, expressing your gratitude for their loyalty and support. In the note, let them know that you’re building your business through word-of-mouth and personal referrals. Ask if they’d be willing to recommend you to their friends and associates that could benefit from your services. You could even include a small gift card as a token of your appreciation for any new referrals.

  • An in-person conversation

An in-person meeting over coffee or lunch is ideal for your top clients who are the most likely to deliver valuable leads. During your conversation, tell them that their business and referrals are instrumental to your growth, and explain your referral program and incentives. Ask open-ended questions to get them talking about people in their network who may need your help. People find it hard to say no in person, especially over a meal, so your chances of getting referrals will be high.

A combination of phone calls, personal notes, and in-person meetings with your happiest clients is the perfect recipe for gaining quality referrals and growing your business. Just remember that enthusiasm and incentives are key to motivating your clients to spread the word about your services.

Managing incoming referrals with lead capturing software

Reaching out in 5 minutes increases conversions by 100x

Before you you start requesting referrals, you need to set up  a system to manage all the new leads that will soon arrive. It’s best to connect lead capturing software with built-in referral tracking features to your scheduling apps and customer management systems (CMS), so you can keep track of all your new leads and convert them into customers.

Here are four steps to managing incoming referrals effectively, and using them to drive more revenue.

  • Track where referrals come from

Use referral tracking tools to know exactly which clients sent referrals your way. This way, you can mention the referring client’s name when you get in touch, to make the connection more personal. It also means you can send the client a quick thank you message, to make them feel appreciated and encourage future referrals.

  • Reach out right away

Contact referral leads immediately, and we really mean immediately. Studies show that reaching out within 5 minutes of receiving a lead can increase their chances of conversion by 100x. It’s easy to reach out quickly when you have an engaging email template ready to personalize for each new lead.

  • Make it easy to schedule consultations

If there’s too much friction in your booking process, your new leads will drop away. An online booking system like vcita’s simple booking widget makes it quick and easy for new leads to schedule a free initial consultation. Meeting face to face (or online) allows you to build a relationship that makes it more likely that the lead will become a paying customer, plus you can learn about the lead’s needs, answer any questions, and see if they’re a good fit as a client.

  • Track your success

Monitor which marketing campaigns, incentives and tools are generating the most referrals and new clients. You want to be able to see which referral sources are the most productive, so you can focus your efforts in the right place. With the right management, referrals can become your business’s best new lead generation channel!

Using software solutions to keep close tabs on referrals  can turn what could be a disorganized mess into a well-oiled customer acquisition machine.

Start collecting referrals

With the right approach, referral generation can become an important part of your lead generation strategy. Now you know how to reach out to your best clients, ask for their help, and organize the results into an effective system that drives revenue and helps grow your customer base. Using these tips and the right software, you’ll rake in the referrals in no time.