Why You’re Not Getting Referrals: The Straightforward Truth and How to Fix It #1

The reason that business owners, like me, don't get referrals is because we don't ask for them.

Simple as that.

We don't remind customers that we are open for business.

We just need to basically say, "Please send me your friends."

If you are not getting free referrals, You're not ask for them.

If you ask and customers don't give you referrals, then your product or service sucks.

(That is a different problem for another article)

Your customers, like any audience, can only know what to do, if you tell them.

Here Is A Case Study

Dropbox gave away free storage to customers and free storage to the friends they referred.

That referral program went viral.

Dropbox 30 times'd their business in 15 months.

Here Is A Second Case Study

PayPal gave a $10 credit to customers and $10 to the friends that they referred.

Within two years the program helped PayPal reach a million users.

Six years later Paypal hit a hundred million users

FYI... Paypal still uses that program today.

Image where you would be today, if your business had a hundred million users?

What I Have Learned

I have learned there are seven basic ways to ask for referrals.

The first and easiest is THE ONE-SIDED REFERRAL BENEFIT.

I don't know about you, I would rather pay customers than pay a platform like Facebook, Google, LinkedIn, Yelp, TikTok, et al.

So why would I pay Zuckerbucks or China money when I could pay my customer, Mark, to send a friend Jennifer?

Now, look at your advertising expense on your credit card statement and think, Okay, what did I spend on YouTube or Facebook or cold calls or whatever in order to get a customer.

What's your total CAC (Cost To Acquire A Customer)?

For example... Let's imagine your CAC is $100.

Now, change your habit of buying ads and, in your head, say to your customers; "Hey, anyone want this $100? Because if you do, I'd rather pay you."

That becomes the incentive for your customer to bring a friend.

ONE-SIDED REFERRAL BENEFIT

The ONE-SIDED REFERRAL BENEFIT is the simplest referral program out there.

So how am I doing this in my business?

For Current Customers

I ask my current customer to make a 3-way introduction to a friend via a Call, Text or Email

NOT... just a name and number.

For New customers

Same process as above, I just do it immediately as part of the sign up process.

I DON'T WAIT.

Then I write them a check for $100 when their friend signs up.

Also, instead of write a check, you can give the customer a $100 credit or discount.

NOTE: Just make sure your credit / discount is not more than 1/3 of what it costs you to deliver the product or service.

This is the simplest referral program.

Implement this today

FULL DISCLOSURE

This article was inspired by Alex Hormozi.

I make content to make money and bring attention to our service.

My intention is to build trust with business owners so we can find the best ones and help them become more efficient, profitable and scaleable.

My team and I are in no way associated with Alex Hormozi or any of the companies he owns.

I just think Alex puts out the best content for Entrepreneurs and Operators.

Enjoy