If you don’t know what a referral program is, it’s a way of marketing and promoting your services to new customers through referrals from your existing customers, suppliers, or partners; usually this happens via word-of- mouth. However, you can influence this by setting up a dedicated program to encourage people to spread the word about your business.
Why should you have a referral program? The most obvious answer is to get new customers, but that is a mammoth oversimplification. In the IT support and managed services business, word-of-mouth advertising is always best, because there is a high degree of trust required by the client, and this trust can be immediately inferred through the referral process.
In addition, referrals (even if they are well-rewarded) are relatively inexpensive, given the quality of the lead. I gave out $5 gift cards for each referral up to a maximum of 10. This meant giving a possible $50 to each of my clients. That sounds expensive, but considering each one of those names is a fully qualified lead that does not need to be convinced of your trustworthiness, you are much further ahead than if you’re relying on cold calling—or “dartboard” marketing, as I like to call it.
First, decide if it is going to be a perpetual program or just a campaign. If you are concerned with the expense of the rewards and want to test it first, just do a campaign. If you want to build a perpetual referral engine that continuously feeds qualified leads into the top of your sales and marketing funnel, then create a program. Once you make this decision, here are five things you need to get things rolling:
Once you have designed your program or campaign, you have to actually ask for the referral. Here are some ideas:
Once you get a lead from a customer, treat it like gold. Like I mentioned earlier, referred leads have most likely already overcome the barrier of trust, which is so pivotal in the IT/MSP business segment. Track your leads in your CRM and categorize them somehow as a referral, so that you can treat them differently.
In conclusion, referrals can be the most cost-effective way to generate leads. It is highly targeted because they are coming from your existing client base. They have high conversion rates because trust is already established, and there is an implied mutual relationship between you, the referrer, and the lead. You already know that word-of-mouth is your greatest source of new clients—leverage that to increase the lead flow into your sales funnel, and build greater revenue.
Eric Anthony is Director of Customer Experience at SolarWinds MSP. Before joining SolarWinds, Eric ran his own managed service provider business for over six years.
You can follow Eric on Twitter® at @EricAnthonyMSP
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