One of the surest ways to acquire a valuable long-term client is to be referred by an existing client. This can save 20–50 percent of typical new customer acquisition costs and eliminates the time-consuming and challenging three-way bid process most companies engage in because the prospect already trusts your ability to effectively handle their challenges.

Interestingly, only 30 percent of all industrial companies have a formalized referral program. To join their ranks and grow your business, here is an outline to help create a stream of regular referrals.

1. Define goals for your referral program—what type of prospects are most desirable?
2. Create a database of satisfied customers.
3. Develop a communication strategy that encourages customers to provide referrals.
4. Delineate what your expectations are for referrers/ambassadors.
5. Provide them with simple messaging to communicate.
6. Determine incentives for referrals—this could be a discount on future services, a cash reward, or a dinner coupon.
7. Measure the impact of different incentives to determine what’s most effective.
8. Reward referrers/ambassadors throughout the year with simple thank-yous, swag, and other helpful items.

Customer referrals are important to your company for many reasons and almost always have a positive effect on your bottom line. For more information regarding referral programs for manufacturers, visit IndustrialMarketingExperts.com.

Written by Woody Stoudemire

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