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Added Value: 4 Ways Referrals Build Business

|  April 1, 2015
Illustration: ©

Illustration: ©

We know getting referrals is an important step toward growing a business, but have you thought about why it’s the best way to strengthen your bottom line?

I’ve preached this message to my sales and service staffs since the beginning: If referrals had not been on my radar a long time ago, I wouldn’t have the business I enjoy today.

Referrals have many benefits, but let’s explore four big reasons why this type of marketing is so effective.

1. The sky’s the limit on your list of contacts. The client list your company has built throughout the years could be vast, but the list of people you know from church, school, civic clubs or other organizations is boundless. As your business life expands, your network continues to expand — with no end in sight.

2. You work for a higher-quality customer. Because referred customers get your name from a trusted friend or relative, they already want to do business with you. Sometimes referred customers don’t even bother to ask about the price, because they’re more interested in quality of service.

3. You live up to the hype. As Ernest Hemingway said, “The best way to find out if you can trust somebody is to trust them.” So when your current customers or friends trust you with a referral, make sure you don’t disappoint and make them look bad for referring you. This is where your company will have to ensure that everyone is on the same page when it comes to performing great customer service. No exceptions.

4. You reduce the competition. With referrals, you’re no longer competing with the best-looking ads, placement or even best keywords and organic placements on the Internet. This is critically important, because advertising in any form is becoming more expensive each year. The low cost of getting referrals is a great benefit to your advertising budget.

With advertising, you put your money on the line and hope for the best with no guarantees. Referrals are much more of a sure thing.

Let’s cut to the chase: If you don’t have a referral reward program in place, I highly recommend creating one. For example, my company gives a $25 gift card to any customer who provides a referral that leads to a new customer purchasing our recurring services. Also, with a referral reward, you don’t have to pay until after the service is paid for.

There are so many more reasons to ask for referrals — the benefits are enormous. Don’t delay; start the process of getting them now.

In friends they trust
Eighty-four percent of consumers trust recommendations from their friends, and they trust those recommendations seven times more than other advertising, according to an Extole Inc. survey.

You can reach Ray Johnson, a past president of the National Pest Management Association (NPMA), president of Sevierville, Tenn.-based Johnson Pest Control, and founder of ACES for Business, at

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