The Death of Referral Marketing?
I’ve written often about the death of word-of-mouth marketing. Now, I'm ready to add its close friend to the graveyard—referral marketing. But I want to be careful here, however, to differentiate the importance of whether your clients say they would give you referrals, and whether they actually do.
A recent article in the Harvard Business Review concluded that the single most important question to ask a client to determine their level of satisfaction with your products and services is:
“Would you recommend us to friend?”
Companies who scored high “yeses” to this question had a direct correlation to strong future growth and profitability.
So the fact that someone would refer you to friends is critical, but whether you actually ask them to do so is a different matter. My primary source for this is an author and telemarketing expert named Bill Good. If you do much telemarketing (or are thinking of doing so) I highly recommend you read Bill’s book, “Prospecting Your Way to Sales Success.”
The interesting thing to note is that when this book first came out in 1986, Mr. Good was a huge proponent of referral marketing—that is of directly asking your clients to name names of their friends, sort of the way we traditionally think of life insurance sales agents as acting.
But by the time Mr. Good published a revised version of his book 11 years later, he had this to say about referral marketing:
“I now understand why it is so hard to get salespeople to ask for referrals. They know in their heart of hearts that it doesn’t work.”
He went on to note how asking for referrals not only puts your client on the spot, but generally leads to names that are little better than cold names you could acquire from dozens of sources.
One more distinction: Mr. Good cautions that what he is trying to avoid is not referrals, but simply the awkward, pushy scene in which you grill your best clients. Instead, he suggests you create a consciousness by simply telling them, “I’d greatly appreciate anyone you could refer my way,” without forcing them to name names on the spot.
Do you agree? Or have you had positive experiences with specifically asking for referrals? Leave your comments.
A recent article in the Harvard Business Review concluded that the single most important question to ask a client to determine their level of satisfaction with your products and services is:
“Would you recommend us to friend?”
Companies who scored high “yeses” to this question had a direct correlation to strong future growth and profitability.
So the fact that someone would refer you to friends is critical, but whether you actually ask them to do so is a different matter. My primary source for this is an author and telemarketing expert named Bill Good. If you do much telemarketing (or are thinking of doing so) I highly recommend you read Bill’s book, “Prospecting Your Way to Sales Success.”
The interesting thing to note is that when this book first came out in 1986, Mr. Good was a huge proponent of referral marketing—that is of directly asking your clients to name names of their friends, sort of the way we traditionally think of life insurance sales agents as acting.
But by the time Mr. Good published a revised version of his book 11 years later, he had this to say about referral marketing:
“I now understand why it is so hard to get salespeople to ask for referrals. They know in their heart of hearts that it doesn’t work.”
He went on to note how asking for referrals not only puts your client on the spot, but generally leads to names that are little better than cold names you could acquire from dozens of sources.
One more distinction: Mr. Good cautions that what he is trying to avoid is not referrals, but simply the awkward, pushy scene in which you grill your best clients. Instead, he suggests you create a consciousness by simply telling them, “I’d greatly appreciate anyone you could refer my way,” without forcing them to name names on the spot.
Do you agree? Or have you had positive experiences with specifically asking for referrals? Leave your comments.
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