As companies begin to grow and continue to scale, there are a variety of issues that they face.
But there’s one thing that all businesses need to monitor, regardless of their growth stage or size. Whether it’s a start-up or a major corporation, all companies need to maintain a robust sales pipeline.
At the expansion stage, a company’s first few adopters and customers are essential to driving initial revenues. But once those prospects are converted, new targets must be quickly identified and pursued. If the pipeline isn’t replenished with qualified leads, a company can’t continue to grow.
It’s a natural and common problem. A great inside and outside sales team focused on closing qualified leads can make significant headway in developing and building a sales backlog. If a company complements that with strong inbound and outbound marketing programs and account managers working to up sell its current customers, that does even more to fill the pipeline.
But executives and entrepreneurs shouldn’t assume that they’ve exhausted every potential outlet if they’ve executed those tactics. Many businesses fail to supplement their sales efforts by leveraging a truly captive marketing asset: their own customers.
Referral business can keep a company’s pipeline brimming with prospects. By taking a systematic approach to referrals, you can make your existing customers some of your most productive salespeople.
John Jantsch’s recent book, The Referral Engine, offers a nice framework for creating a referral lead generation system. Joseph Jaffe’s Flip the Funnel is another great read. In both of these books a few overarching themes and tips come through:
- Don’t jump the gun. Wait at least six months after a customer signs on to ask for referrals, giving them time to experience your product or service. That time will make their word-of-mouth reference more credible and substantiated.
- Focus on a customer subset. At the beginning of a referral program, focus on your most loyal customers. Those customers are most likely to be familiar with your product and you should leverage that relationship. If a customer loves your company, it will undoubtedly lead to stronger referrals.
- Offer a reasonable rewards program. One way to show customers how much you appreciate their referrals is to offer them a small incentive or bonus. That can be as little as a gift card or as much as a month free of service. Either way, your customers will feel rewarded and will be much more likely to provide you with more referrals in the future.
- Thank your referral base. Sending a form letter or e-mail with a simple thank you for a referral can work wonders for fostering repeat referrals. It’s a simple concept, but developing and growing a referral base isn’t too dissimilar to the process of acquiring new customers. Small gestures like a thank you note can strengthen your relationship with your customers, increasing the likelihood of receiving quality referrals.
Whether it’s B2B or B2C, a referral program is a highly productive lead generation tool at very little cost to the company.
Source: Daniel Killeen – OpenView Partners.
About Scale Finance
Scale Finance LLC (scalefinance.local) provides professional CFO services, Controller solutions, and support in raising capital, or executing other transactions, to growth companies. The firm specializes in cost-effective financial reporting, budgeting and forecasting, implementing controls, other financial management, etc, and provides strategic help for companies raising growth capital or considering M&A/recapitalization opportunities. Most of the firm’s clients are fast-growing technology, healthcare, business services, consumer, and industrial companies that are at various stages of development from start-up to tens of millions in annual revenue. Scale Finance LLC has offices in Charlotte, the Triangle, the Triad, and Wilmington, a team of more than 25 professionals, and serves more than 85 companies throughout the region.