One of the biggest expenses for some businesses is advertising. Think about the auto repair shop, the kitchen cabinet maker, the plumber, etc. They can spend a small fortune each month running ads that might not even pay off. After all, what is the reaction of most people to advertising? It's disbelief. "Sure he says he's good, so what? They all say that!"
But what if you can show offline clients how to get all of their business from referrals, thereby saving the money they spend on advertising? What would that be worth to them? Frankly, it should be worth about 2-3 months of their current advertising budget, paid directly to you.
Know that this won't work for all businesses, so use your best judgement on which businesses to work with. And while every business will be different, you can quickly learn the basics on how to set up a referral system that brings in as much if not more business than their current advertising.
Let's use an automotive repair shop for our example. First, what do most people think of when considering auto repair places? The shops are dirty, the mechanics try to take advantage of customers by doing work that doesn't need to be done, they take too long to make repairs, you have to arrange for transportation while you don't have your car, their waiting room is depressing, etc.
We want to change all of those things. Cleaning the shop up won't cost a thing beyond labor and it can make a tremendous difference in how people perceive the shop when they arrive. If the outside of the shop needs a new coat of paint, some flowers planted in the bed out front or a fresh sign, it should be seen to. This alone can bring more business in off the street.
Next, unless the mechanics are really good at explaining what needs to be done to the mechanically illiterate, there should be a liaison between the mechanics and customers. This liaison will show the customer what the problem is, what might have caused it, why it needs to be fixed and what it will cost. A clear, thorough explanation without technical mumbo-jumbo can go a long way to putting the customer at ease and making them feel they're not being taken advantage of.
If the work is going to take longer than, say, 90 minutes, the auto shop either provides a loaner car or offers to drive the customer to their home or place of work, picking them up when the car is ready. How many auto places do this? Almost none. Imagine the word of mouth this alone can create.
If the customer opts to wait for the car, they're shown into a waiting room that looks more like a living room than a nasty waiting room. The chairs are plush and comfortable, there's flat surfaces if they want to work on a laptop or do anything at a desk, and instead of the usual daytime television, there's a DVD playing of a truly funny and non-offensive comedian. Who doesn't feel better after laughing? Plus there's beverages - not just coffee - and maybe even some bagels, fruit or danish.
After the repair is made, the car is washed and cleaned. The bigger the repair, the better the washing and cleaning. This could range from a quick exterior wash to a full wash and wax outside, vacuuming and wipe down inside. An alternative would be to set up an affiliation with a nearby car wash, getting car wash tokens in bulk at a discount. Then for every $x amount of money spent, the customer gets a token. If the amount is $50, then on a $300 repair job the customer would get 6 tokens which could be used for 6 car washes. This is hugely unexpected by the customer and something they're likely to brag about to others for weeks.
If the customer doesn't receive car wash tokens, she should be given something. It could be as simple as homemade looking cookies for the road or a cup of good coffee to go. As the customer is paying her bill and receiving her tokens, she gets a very brief questionnaire about her experience. The final question is, "Can we use your comments for marketing purposes?" Thanks to the law of reciprocity and the small gift she received, she's almost certainly going to say 'yes.' These comments can be put on the business' website, and after several months should number in the hundreds. If they ever do more advertising, all they'll need is a list of these comments along with their hours and location to create a very effective ad.
The customer gets an actual thank you card in the mail within 2 days of her experience at the shop. On the card is a photo of the shop with all the employees out front, holding a giant blank sign. Only the sign isn't blank, it only appears that way when the photo is taken. Before sending it out, "THANK YOU customer name!" is hand written onto that blank sign. If they have the technology they can do this in Photoshop, but hand writing it in is fine. In the card is a very warm thank you along with 2-3 magnets containing the business' details and the suggestion she give one or two to friends.
Finally, 3 to 6 days later the customer gets a follow up phone call, inquiring if the car is still running fine and making sure everything is alright. If there should be any problem, being this proactive will keep the business in good favor with the customer. And if everything is fine, it leaves the customer with a very warm, cared-about feeling that they simply don't get with the typical auto mechanic.
This has been just one example – how you set up a referral program will vary according to the type of business you're working with. You probably noticed that nowhere in this sequence did we actually ask the customer for referrals. Typically the best way to get great word-of-mouth advertising isn't to ask for it - it's to give the customer such an amazing experience, they just have to brag to others about it.