When you first start out in business, you can’t afford to miss a sale. You actually need that revenue, probably more in the beginning than any other time in your company journey.
Making sales won’t just sustain your business, though. If leveraged correctly, they can help you scale quickly. And to really grow, you need to make sure you’re taking advantage of every sales opportunity at your disposal. And some of the most untapped resources that new business owners often overlook are referrals and indirect sales.
Are you working your referral leads?
Okay, so that whole thing about “It takes a village to raise a child” isn’t just a saying – it’s the truth. And as the leader of your own company, you should be taking advantage of every person in your community who knows someone else who needs what you offer. Sure, everyone leads busy lives, and it might seem like asking them for help would be too much to ask. And remembering to actually follow up with people might feel like a waste of time. But this could not be further from the truth! So every chance you get, tell everyone about your business and demonstrate how they can promote it to their contacts.
A lot of business owners never take advantage of indirect sales and referrals. This is a mistake because these two types of sales can be huge contributors to your bottom line, especially when you’re just starting out as an entrepreneur. But how do you turn these potential opportunities into actual sales? A lot of people think that it requires luck or some kind of special touch… but the truth is, there are definite steps you can take to maximize both referral leads and indirect sales. In this conversation, we’ll explore results-driven ways to get more from your customers by making better use of their connections with others.
Indirect sales are the sale of a product or service by a third party, such as a partner or affiliate, rather than through company personnel. Indirect sales may be used in tandem with a company’s direct selling operations or instead of employing salespeople.
What it really means is collaborating with someone more prominent than you who already captivates your target audience. Channel your company message through their platforms to reach more potential customers.
Here are some examples that might help provide clarity.
Content Marketing: If you sell dog food and need to find dog people, look for affiliates online who already routinely engage with those dog people. Offer to share, refer and collaborate across other content platforms, allowing you to share in the publicity.
Here’s an example. Have you heard of Raycon earbuds? They’re incredibly popular as alternatives to some of the leading products out there with hefty price tags. Raycon’s earbuds produce incredible quality sound for a fraction of the cost. And the company relied on successful YouTube influencers to introduce and endorse its products. Sponsoring favorite YouTube channels and content contributors, Raycon experienced unprecedented sales of their revolutionary new earbuds on a budget.
PR: Public relations is another great way to drive indirect selling opportunities. Look around in your community for other businesses that may share goals or corporate responsibility with your company. Align forces and do good deeds together to drum up new sales leads not traditionally available to you. For example, a local Mercedes-Benz dealership might partner with Hilton for a romantic Valentine’s Day giveaway. Both businesses have different offerings, but their audiences are in the same luxury buying segment.
Social Media: If there is a social media mogul in your industry, tying your company to those threads by sharing hashtags or commenting intelligently about company-related topics can help boost your visibility. For example, a staffing company might jump in on Mike Rowe’s Twitter or Facebook conversation about Dirty Jobs.
Referrals: Referrals might be the OG indirect selling technique. Asking someone else to speak highly of your service or send business your way has been around for centuries. Getting the most mileage out of your referrals today, though, requires some digital finesse and ongoing grooming. For example, a real estate agent might ask the local travel and visitors center to hand out flyers about area properties for sale. If you own a greenhouse, you might ask that real estate agent for homeowner referrals for landscaping needs.
See how this works?
Now let’s talk about referral selling. Official definitions include simply asking existing customers to refer your company to others. Build on the trust you’ve already built with your existing pool and deputize them to help generate new leads.
Uber demonstrates a great example of a company that leverages its referral network to generate new leads. The rideshare user gets rewarded with those popular “Free Rides” if they refer the service to their friends. And the success story is on display for all of us to see. Uber has redefined the traditional “loyalty program” and, despite some of its early controversy, clearly understands that referral marketing works.
Uber’s not wrong because 92% of respondents trusted referrals from people they knew. That’s 92%, and it’s a huge deal! And when 37% of referrals possess a higher retention rate, it’s a target market you can’t afford to ignore.
Meet Frank: Frank is developing a sales strategy for reaching some of those corporate clients where he can sign up companies for a weekly or monthly dry cleaning schedule. He envisions picking up dry cleaning clients for uniform service as well as office buildings of individuals needing their professional attire cleaned. As Frank lays out his sales funnel and crafts his value pitch, it dawns on him. He has individual customers that come in all the time who work at some of these places. Maybe he can ask them for corporate referrals or give them sales collateral to take to work with them. Frank has a tremendous opportunity for growth if he taps into his existing customer base for referrals.
Here’s the really great thing about referral selling – you don’t just have to ask for a sales conversation for referrals to be helpful to your ROI. You can ask your best customers to help you with other things. And there are a million ways to incentivize the referral process.
Depending on the general nature of your business and what you sell, you might not be in a position to ask for a direct sales lead. Instead, look for ways to ask for email addresses or company contact suggestions that might help your sales process. You might even be able to uncover insights about how to approach a potential new sale with intel a current customer can provide.
Example: Let’s imagine you’re in a business where the only way you can land new clients is by participating in corporate RFPs. One of your biggest unicorn dream accounts is like Fort Knox to even get into for consideration. But if one of your existing clients happens to know key decision-makers, seasonal bidding timelines, or details, that information can become just as valuable as a direct referral.
Don’t just ask for referrals. Instead, create an entire referral program that everyone can get behind and support. Be like Uber if your business model allows and make it valuable for buyers to refer others to your company.
Example: Your favorite apps online likely send you offers of cash, rebates or perks if you’re able to sign up another user. And to make the refer-a-friend deal even sweeter, the app provides a first-time user discount along with your reward, making it a win-win for both sides.
Even if you can’t win every customer referral for new business, your business model should include a policy asking new-to-you buyers to write online reviews. Make it super easy by providing links to your preferred review sites, including Yelp or Facebook. An ongoing and growing bank of five-star ratings can be incredibly advantageous for your company’s online business presence.
If you are in the jewelry business, you’re not going to be giving away any diamonds for free. But maybe you can offer a number of free jewelry cleaning services or take-home tools for DIY jewelry cleaning for free instead. From webinars providing free advice to local gift cards, offer as many freebies as possible that are relevant and value-driven to your company.
As part of your follow-up engagement strategy, consider implementing post-buying surveys to help you gauge areas of improvement in your service model. And take those dedicated efforts one step further by including an ask for referrals.
Some of your greatest referral resources are your friends, family and employees. Don’t forget to tap into them in identifying new sales opportunities. And be liberal with your incentives for them just as much as you would be for anyone else referring new business.
Meet Abby: Abby’s pizzeria does well with regular dine-in customers. But again, she wants to expand her menu and services to reach the corporate lunch and meeting market. She thinks about how company coordinators make purchasing decisions. They want good food, efficient delivery and affordability. So at her next community networking meeting, she announces to her group of fellow business leaders that she’s launching a referral rewards program. Refer a new corporate lunch customer and enjoy a free pizza dine-in. Abby decides that it’s a good idea to make this option available to her existing customers, as well. In no time at all, Abby has new leads rolling in and her lunch catering schedule is booking up fast.
There are right and, of course, wrong ways to ask for referral business. Some of these tips might seem like no-brainers, but they’re worth mentioning.
Use Referral Templates: Don’t fake it ‘til you make it with referrals. Like you would with a dedicated sales funnel and process, use templates and guidelines to develop a robust referral program you can manage, maintain and teach to others.
Value First, Referral Second: Don’t be dumb and ask for a referral from someone who wasn’t 100% enthusiastic about their experience with you. Make sure you focus on building value first, extending the best customer experience, THEN asking for the referral.
Referrals Aren’t Cold Calls: Following up on a referral isn’t a cold call encounter. Don’t treat it like one. Instead, use the referring sources as your “reason for reaching out” and effectively treat this first engagement like the warm call it is.
Be Liberal with Your Incentives: Don’t make a habit of asking for favors without offering some kind of reward. It might work at first. But people will be more inspired to talk about your company with others if they know there is an added value perk in it for them.
Referrals Are for the Long Game: Don’t kick off a referral program and get pissed when the leads don’t start rolling in immediately. Referral and indirect selling is a long-game strategy that may take weeks or months to create a consistent flow of opportunities. This also means don’t get impatient and give up on a campaign before it’s had a chance to do its thing.
In a way, referral and indirect selling sources can be more important to your new business bottom line than targeting the end-user buying audience directly. Before Al Gore invented the internet (just kidding,) businesses relied on word-of-mouth business. You can still leverage those benefits today, albeit with new digital and virtual channels instead.
As you develop your sales funnel and strategy, don’t forget to explore your indirect selling and referral selling opportunities. And, as always, if you need catered advice or assistance with setting up a referral network that works for your bottom line, let Awareness Business Group help! Next up, we’ll be sharing the latest and greatest sales trends today that new businesses can’t live without right now.