3 Tips to Build Your Referral Based Business

referral based business model

Maya Angelou said it best: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.

If you leave a person feeling some type of way, whether it was a positive or negative, they will tell others about it. An individual’s experience with a product or service can persuade or discourage others from trying it.

A referral-based business is a business where customers and clients are generated through referrals. Meaning, existing customers recommend the business to other people and express why they should try the service or buy the product.

Referral-based businesses can be extremely successful if they provide a positive experience to their existing customers. Companies like Uber and Airbnb are great examples of how prosperous a referral-based business can be. If you refer friends or family to either company you will get money off your next stay or ride.

Unfortunately, one bad review can go farther than a thousand good ones. This is why it is extremely important to provide a seamless experience so customers are more likely to refer to the company.

Bicom Systems values the referral-based business model and are happy to support our partners in any way we can. One of our partners, NextGen, grew their business quickly through referrals. Check out John Tinning’s, owner of NextGen, story of breaking free from 3CX here.

To better help our other partners and readers who are using a referral-based business model, we conducted a list of useful selling tips.

1)  Network in the Right Places
It is important to focus on your target market and network somewhere that gives you a competitive advantage. For example, real estate agents should not waste much time networking with other real estate agents. They should be out scouting for people who are looking to buy or sell a house. Yes, it can be useful to collaborate with other agents to gain industry knowledge, but when other agents are looking to buy a house they will most likely use themselves for an agent.

It is important to get out of your comfort zone and find people who could end up being potential clients. Chances are, if they can’t benefit from your product or service, they may know someone who could. Building your network will ultimately give you more opportunities.

2) Provide Excellent Customer Service
If you are going to rely on customers to refer and recommend your company you will need to give them a reason too. If we circle back to the quote at the beginning of this post, Maya Angelou is right. A customer will always remember really good experiences and especially the really bad ones. Make sure you go that extra mile for each customer and are patient and understanding.

People are more inclined to try something based on the opinions of someone they trust like a friend, family member or influencer. The relationship they have with the person will affect their decision to try your product or service. Referrals (negative or positive) are more powerful than random ads found on a billboard or magazine.

3) The Appreciated ‘Ask’
After providing exceptional customer service to your clients, you need to ask them to refer you. Remember to be honest and polite. Remind them of your goals to grow your business. You can even take this opportunity to offer incentives to customers who do refer to you.

Offering incentives to existing customers is a good way for businesses to show their appreciation. For example, by referring a friend to your business, you could offer the customer a percentage off their next purchase. Not only will this entice customers to refer more, but you will have the opportunity to connect with more customers.

If your business is not quite ready or is not in a position to offer incentives, a simple thank you note can go a long way. It will show your appreciation and will leave the customer feeling positive about your business post-purchase.

To learn more about some of our partner’s success stories using a referral-based business model, take a look at our website.

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