Part 2 of BlastPoint’s IFA Roundtable Roundup Series:
Am I Making the Most of Customer Referrals?
Author and franchise expert Mark Siebert defines customer referrals as “recommendations by existing franchisees, suppliers, or other people ‘in the know’ about the value of your program,” and says that “leads from genuine referrals have some of the highest close rates in the industry.”
Referrals are particularly useful for emerging franchisors. Why? Brokers, who traditionally function as the go-to resource for connecting franchisors with prospects, are often hesitant to take on startup brands because of lack of capital and lack of established proof that their businesses are viable.
It’s a case of the age-old chicken-or-the-egg conundrum.
How do you establish proof of viability to harvest customer referrals when you don’t have any yet? One way emerging startups are doing so is through data. New brands like our friends at The Dog Stop, PICKUP, and others are demonstrating that their franchises are viable—with potent likelihood that they’ll be profitable and robust, too—based on technology tools like predictive customer behavior and location analytics. And, guess what? Both of these startup brands are enjoying phenomenal growth.
The data speaks for itself, but don’t overlook the fact that existing customers already believe in your vision, values, and brand, and that they can function as the ultimate evangelists that will spread the good word about your company.
If franchisees aren’t already generating leads organically, by virtue of offering great service and thereby gaining loyal customers, don’t be too shy to ask for their help in introducing you to potential prospects. Ask if there’s a customer who raves about how much they love the brand, and see if the franchisee could set up a meeting with all three of you. Offering a referral fee to existing franchisees is a common, and effective, incentive.
For more creative ideas on incentives, check out ReferralCandy.com’s list of programs that are helping companies land new customers.