When we first started Praiseworthy it was extremely difficult to get the word out about the product. Individual Feedback Management was not something that already existed, so we had to educate people about how the product enhances the connection between customer service and employee motivation. It wasn’t an easy sell because it changed the way business owners think about their customers and employees.
In 2014, our first year of business, it was tough to get even one paying customer. I was working as a model on the side to pay the bills. There were times when I took sales call between shots, dolled-up in an insane amount of make-up and curlers. Luckily prospects had no idea this was happening, and I definitely made sure not to do video conferencing!
While juggling this crazy lifestyle, we tried everything to market ourselves: telemarketing, Google AdWords, nurture campaigns, postcards, posters, stickers — you name it, we probably tried it! Despite our efforts, sales were tough and pretty stagnant for most of 2014. It is hard for a new company with a totally new idea to build trust with new prospects. Apparently there is a lot of noise out there, and prospects had been jaded in the past with products that did not work for them. It was almost impossible to engage or educate prospects through cold outreach.
After nine months of incessantly pounding the pavement, and failing 99.99% of the time, we finally convinced two Verizon dealers to try out Praiseworthy. These two authorized retailers represented fifty total store locations for us. They fell in love with Praiseworthy’s ability to increase their Net Promoter Scores and motivate their employees. We were able to leverage their testimonials and their network of referrals to get meetings with other wireless retail agents and owners. Before we knew it, we had reached what the founder of the first Software-as-a-Service company, Paul Graham, refers to as “ramen profitability”. At that point, my co-founder and I could afford to focus on Praiseworthy full-time.
Since that time, we have been able to generate over $600,000 in revenue through customer referrals, and are now growing an average of 5% per month, through customer referrals alone. We are by no means “crushing it”, but it is nice to know that we can reliably expect to grow an average of 5% per month through customer referrals alone.
In this post, I will share with you the five steps you can follow to ensure that you and your team can steadily generate referrals from promoters of your business.
Before reading further I must warn you that in order for this process to succeed, you MUST already:
- Offer stellar customer service to your customers and build great rapport in your interactions with those clients
- Offer a great product or service
If you already offer the two items above, you are good to go! Now let’s get to the juicy stuff!
1. Get To An “Aha” Moment As Quickly As Possible
My full understanding of the importance of “aha” moments came when I was invited to The Walt Disney World Resort last year for a client conference. I have to admit that I was nervous and not super excited. In my head, I was thinking there will be big crowds, complications with travel (getting from the airport to the resort, to the park) and I imagined I would most likely encounter an overwhelmed and untrained staff bogged down by high foot traffic. After all, Disney World receives 20 million visitors per year.
My experience was the opposite of what I expected. From the moment I arrived at the resort, the attendants were unbelievably helpful, friendly and upbeat. Signs, processes, and systems were clear, concise and efficient. Within ten minutes of arriving, I had an “aha” moment with the Disney brand. Their amazing staff and streamlined processes were designed for rapid intake of large conference groups. They went out of their way to make the visitor experience memorable. Not only did I enjoy my stay there, but I also had the urge to come back again in the future. By the time the conference was over, I couldn’t believe how easy and relaxing my business trip had been! And that is a memory that still impacts me today — so much so that I wrote two whole paragraphs about it!
Just like my experience at Disney World, we try to create that “aha” moment from the first interaction with potential Praiseworthy clients. That is why we do something counter-intuitive on our introductory call with prospects. On the first call, we don’t try to sell Praiseworthy. Instead, depending on the size of their business, we offer up to 3,000 surveys to be sent for them, for free! Access to our dashboard is free. Onboarding is free. No hidden costs. No smoke and mirrors. No tricks up our sleeve. We call it our Free Feedback Analysis. Our goal is to work with the prospect through their buying process, tailoring each survey and product feature around their individual needs, reviewing the results with them, and making sure that they are the right fit for Praiseworthy as a client.
And this gamble pays off! We discovered that adding this “aha” moment to each prospect’s buying process not only shortened our sales cycle by almost half, but it also brought our close rate up to 84%! That is, for all prospects who decide to have 3,000 surveys sent out for free, 84% move forward with Praiseworthy. Now that is the power of an “aha” moment! When we show clients the value of how much customer feedback comes through, and we show them how to drill-down to evaluate each individual front-line associate, it “wows” them. From that moment on, they know they need Praiseworthy to succeed in their daily business.
This concept can apply to any product or service you offer. You most likely do not run a resort like Walt Disney, or make an Individual Feedback Management platform like Praiseworthy, but you can find a way to quickly get your prospects to a magical “aha” moment. This is one of the keys to increasing your customer referrals because, the sooner you bring that “aha” moment into the buying process, the sooner you can mention your referrals program, which brings us to Step Two.
2. Build A Strong Referral Program With A Fair Incentive
When asking for referrals it’s important to offer some kind of incentive to thank clients for taking time out of their day to refer you to a colleague. At Praiseworthy, we offer a cash discount for every client referral that moves forward with our product. We have some clients who have referred up to five colleagues, so they have received hundreds of dollars off of their invoices. The program is a win-win for both parties.
Note that the incentive program should be built and structured around the price of your product/service. According to referralcandy.com, a popular website focusing on implementing referral programs, “If your product costs more than $100, cash discounts sound more impressive. If your product costs less than $100, then a percentage discount sounds more impressive.” Be sure to make note of this when building your program, and pick the most pragmatic process for your business.
3. Ask For Referrals Right At That “Aha” Moment
With Step One you’ve figured out how to get customers to that “aha” moment ASAP. The great thing about getting customers to that “aha” moment as soon as possible is that it brings trust into your relationship early in the sales cycle, even before you convert the prospect to a customer. Right after the first introductory call we recommend measuring the Net Promoter Score (NPS). You can measure both their interest in your product and their trust in your company by asking the question, “Would you recommend us to a friend?”
If they give you a rating of 9 or 10 it indicates a strong enough interest to use your next touch-point as an opportunity to ask for recommendations of other people who might benefit from your product or service.
4. Ask For Referrals At Multiple Touch-Points With Your Prospects And Clients
When I ask for a referral, I don’t always get a name right away. It may take a couple of weeks or even several months. The referral is usually triggered when the prospect or client is talking to a colleague that has a customer-facing team of ten people or more. Most of our prospects and clients are CEO’s or business owners who are very busy with multiple projects. It can take months to get an introduction. You have planted the seed with your first request at the “aha” moment, and you have to give that seed time to grow. The next time your prospect runs into someone who could be a good fit for your product or service, they are aware that there is a good referral program in place, so they refer their colleagues to your business.
Click here to see the script we use to ask for referrals. It’s based on clients leaving a rating of 9 or 10 on our Individual Feedback Management platform.
5. Send A Handwritten Thank You Note
This is the final step, the icing on the cake. This step is not for the faint of heart! This is not scalable. It is not efficient. It is not what is preached in our modern “automation nation”. Because of that trend, this step can really help you stand out from the pack. It is a great way to forge human relationships, showing your clients how much you care. According to the Harvard Business Review, “The average home only received a personal letter once every seven weeks in 2010, down from once every two weeks in 1987.” In a world where the average person receives over 100 emails and 100 texts per day, a handwritten note is a great way to go above and beyond for your customers, demonstrating how much you value your relationship with them.
When a client is first brought on to Praiseworthy, I take this old fashioned step because I know how much impact it can have. I send them a handwritten thank you card, thanking them for their business, along with a flyer about our referral program. On top of that, I also send a note to the person who gave me the referral, letting them know how grateful I am for their effort. People are busy. When a client takes the time out of their day to provide a referral, I am extremely thankful. I work very hard to create a personalized thank you message. Over 90% of our growth has been through referrals. They are our company’s key to success, so we are especially appreciative to the executives that take time out of their day to promote us through their network.
I’ve spent a long time writing these custom thank you notes. To see an example of one of the latest thank you notes I sent out, click here.