Referrals are a great lead source. We have shared ways to build on referral sources. If you would like to read those articles, we have them listed below:
- 3 Ways to Build your Referrals in 2022
- Build your Referral Sources and Reduce Follow Up Fatigue
- 4 Ways to Show Value to Your Referral Network
- Track your Referral Business and Watch as Your Revenue Grows
When you hear the term referral lead source, it is probably in the context of referrals by customers, trusted colleagues, or a marketing channel such as your website, online ad, or social post. In this article, we want to talk about giving referrals to get referrals.
You have heard the phrase, “you reap what you sow.” This phrase can easily apply “reaping” and “sowing” referrals. Let’s look at an example:
Ken, the owner of Ken’s Kitchen Remodeling, focuses on residential kitchens. He does not remodel bathrooms or other parts of a home. He does not build additions or do new construction. Homeowners will often ask him for a quote in those areas. Instead of telling them no and leaving it at that, he refers them to trusted contractors with expertise in home remodeling, additions, and new construction. He loves to help people find a good contractor even though he does not make money by giving the referral.
However, by doing this, Ken receives referrals from contractors who do not focus on kitchen remodeling, and, in the end, makes money and gains a customer. It is a cause and effect. The contractors like receiving referrals from Ken, so they are more likely to give referrals to him over another contractor.
Giving and receiving referrals is great, but how do you keep track of the referrals. The answer is simple: You use your CRM.
Here’s how it would look:
Ken has a customer who is happy with the kitchen remodel. The customer wants the primary suite bathroom to be remodeled next. Ken does not do bathroom remodels, so he wants to refer his customer to three contractors who can do the job. The customer and the contractors’ information are in his CRM, so he uses his CRM to automate an email introduction. The customer receives an email with the contractor’s information and the contractor receives an email stating that his customer is interested in a bathroom remodel. When the customer chooses a referred contractor, Ken can mark it in his CRM.
On the flip side, when one of the contractors refers someone to Ken, he can record his interaction with the lead in his CRM as well as send an automated thank you message to the contractor.
Through his CRM, Ken can track the number of customers that come from each contractor that he refers. If one contractor is reciprocating more than another, Ken may designate the contractor as a preferred referral source. He would not be able to do this if he did not track the referrals he gives and receives.
Your CRM can be a tremendous asset to help you know who is referring and who is referring business to you. Referrals from lead sources like contractors in Ken’s scenario are often high quality and lead to growth in revenue. Are you giving referrals to receive them and are you tracking them in your CRM? If you are not using a CRM, contact us to schedule a demo of X2CRM and learn how to use it for referrals and to automate communication with referrals.