Of course you love it. You’re gratified that you have a loyal customer who is so happy he recommended you. You know you’ve got an easy, lie down sale. You’re thrilled, because you know this new customer isn’t going to cost you a dime in marketing investment. No ad to create, no media to place, no letter to write, no phone to dial or person paid to dial it.
Ain’t that the beauty of referrals?
So, why do so few dealers have a system for generating referrals?
Most are afraid they’ll offend their customers by asking for referrals. Not so.
Buyers see you as having just solved a problem for them; just made their life easier, their family happier, their world better. At the point of sale, more than at any other time, they feel a sense of obligation to you. It’s the time they’re most predisposed to enthusiastically give you the referrals you’re looking for.
But like everything else, there’s a right way and wrong way to ask for referrals. Do it this way…
1. Review the specific benefits your customer derived from your product or service.
2. Get the customer to acknowledge the value you have provided.
3. Remind your customer that he or she has friends, relatives, and associates who may have some of the same needs, problems and desires.
Now here’s the clincher…
4. Remind them that if they appreciate the relationships they have with these other people who share the same needs, and who stand to lose or gain in the same way your customer did, then it seems the neighborly, loving, moral thing to do, to at least put these people in touch with you, so they can decide for themselves if what you have is right for them.
See the beauty of this? Now they’re not focusing on helping you out. Now you’ve got them thinking of helping their friends.
Of course, if your dealership is to maximize their referral-generating opportunities, there must be a system in place to make sure you and your staff is consistently asking for referrals.
There are two kinds of referral systems… passive and pro-active.
In passive referral systems you’re two steps removed from the prospect.
Basically, you have to provide such a quality product or service that your customer voluntarily tells his associates about it, and tells them so compellingly that the person told voluntarily “looks you up” and functionally says, “Can I do business with you?”
By adding incentives into the mix, you increase the chances of that happening.
Give your customers gift certificates they can distribute to their friends. Their friends then come in and do business, and you issue a reward certificate to the referring customer.
There are two keys to the kinds of gifts you offer in return for a converted
referral. The gift must be something the customer wants and likes, and the gift must provide instant gratification.
If you offer a FREE safety inspection, for example, well, the customer may see value in it, but it’s not fun. It’s also not desirable; not something he actually wants, even though he may acknowledge he need it.
A free fishing pole, boat toys, weekend get-aways, even fuel would be more in keeping with the fun and instant gratification requirements. Gifts don’t have to be boating related either. Dinner and a movie for two is a good reward.
Of course, the most motivated referrals come from passive systems. But there is one drawback…
Because you’re two steps removed, you’re never in a position to assertively market to these referrals. You’re still at the mercy of your customer to do your marketing work for you, and do it so well that it results in a new buyer.
Therefore, also install pro-active referral systems at your dealership.
In Pro-active referral systems you get your customers to tell you who to talk to. And you then take responsibility for making sure those people do get talked to.
The dynamics of pro-active referral systems are a little different from passive systems. You should reward your client just for giving you the names, even if none of his or her referrals ever convert.
Something meaningful enough to be attractive to the customer, but not so valuable that you get hordes of unqualified referrals who you can never convert.
You could use a $10 gift card for your business (your out of pocket about $5.00 when redeemed). Other inexpensive accessories can work from within your dealership are also good, but there are other good, outside incentives. You can use movie rentals, desserts at nearby restaurants, buy one, get one certificates or whatever else you can think of for incentives to secure the names of a customer’s referrals.
You can even use a “Graduated Incentive” referral system.”
For the first referral a customer sends you, who becomes a client, they receive a gift worth $50, for example. The next converted referral might be worth $100. The third $150 or $200. You can take this as far as you like. Depending on the number of referrals, or the dollar volume of sales the referrals generate for you, you could eventually send a referring client and spouse to Hawaii for a week.
One final note on pro-active systems of any kind. If you’re going to ask your customers to give you the names of their friends and relatives, you’ll want to put their minds at ease by making a couple of promises to them…
First, promise you will contact their referral, and by all means, follow through.
Second, promise that you will make their referral an excellent offer… better than the offers you typically make to strangers off the street.
And finally, promise that you’ll never embarrass your customer in any way by applying high pressure tactics to their referral. Make the commitment to contact them and make your offer, but also that you won’t be pushy.
Next time, we’ll talk about the 8 specific pieces you need for the most effective referral-generating systems.
The more referral systems you have operating in your dealership, the more referral business you’ll do, and that can only improve your revenues and profits.
For a FREE 8-page report on referral programs, send an e-mail request to firstname.lastname@example.org. Jim Ackerman is President of Ascend Marketing, Inc. of Salt Lake City. He is a nationally renowned marketing speaker and can be found at www.marketingspeakerjimackerman.com. He is also the author of How To Market Your Crap When the Economy Is In the Toilet… 12 Vital Strategies for Unclogging the American Economy, One Business at a Time, found at www.marketyourcrap.com or www.amazon.com.