Existing customers are the lifeblood of many small businesses because they provide a steady stream of new business at little to no cost.
You have a 60 to 70 percent chance of selling to an existing customer and, in addition to buying from you or using your services, those happy customers also can send others your way. Getting leads from current customers cuts customer acquisition costs, so it works especially well if you, like many small businesses, operate on a shoestring marketing budget.
Here are nine ways a small business owner can generate leads from current customers:
1. Get a customer relationship management system. First, you need a customer relationship management (CRM) system so you can keep track of customer information, keep in touch with current customers and manage new leads. When you get those new leads, the CRM will allow you to target messages to prospective customers without annoying established customers. It’s also important to make sure you have the right insurance in place, such as a business insurance, to handle liability and other risks that come with a steady stream of new customers.
2. Treat customers like friends. People naturally want to tell others about products and services they love, so exceeding expectations is the first step toward landing referrals from your current customers. When Jef Henninger started his law firm in New Jersey seven years ago, it was a one-man shop. His practice has grown to 15 employees, including seven other attorneys. “One of my secrets has been referrals,” he says, adding that he provides aggressive representation and fair billing, and treats clients like friends, taking calls late at night and on weekends and monitoring email almost 24/7. He says: “I view every client as a door to many other clients down the road.”
3. Ask for the referral. While providing a great product might get you some referrals, you’ll leave business on the table if you don’t speak up. “Be ready any time a client expresses how happy they are with your service,” says digital marketing consultant and SEO expert Bradley Shaw, who says 30 percent of his business comes from customer referrals. “Don’t just say thanks. Have a script prepared in your mind to ask for the referral you have earned,” he says. “If you do not ask for the referral, you are not likely to get it.”
His script is simple: “I’m glad that you’re pleased with my work. I’d really appreciate it if you would pass my name along to anyone else you know who would be interested in my services. May I leave business cards with you?”
4. Go the extra mile for customer requests. If you go out of your way to help a client or customer with a special request, they will be more likely to send business your way. You can take inspiration from other businesses, large and small. One example: the manager of a Mellow Mushroom pizza restaurant franchise in Jacksonville, Florida, received a customer request from a U.S. soldier serving in Afghanistan who asked the restaurant to deliver a birthday pizza for his wife. The staff baked a special heart-shaped pie topped with heart-shaped pepperoni and delivered it to her home along with a bouquet of birthday balloons. By using creative thinking and a bit of extra effort, the restaurant wowed a customer and got a slew of free advertising when the sweet story went viral.
5. Nurture relationships with select customers. The 80/20 principle says 80 percent of results come from 20 percent of effort. Apply this to generating leads from existing customers by singling out a few customers likely to send a lot of business your way. Kristin Marquet, owner of Creative Development Agency, which offers brand strategy and social media marketing, has nurtured a relationship and “become great friends” with a client who has referred over a dozen new clients, six figures worth of business.
How do you spot such a client? Maybe they’re your ideal client and you want more like them. Or it could be their personality and connections. Marquet recommends seeking out the “chatty, warm client who loves your business and has outstanding networking and people skills.” Keep in touch with that client and build an authentic relationship, she says. Email or call periodically to see how they are and send them an e-card on their birthday. Marquet says: “As a small business owner, I like to spend time developing trust with my clients to gain referrals.”
6. Get in the habit of boosting their businesses. If you do B2B as all or part of your small business, consider promoting the businesses of your customers. That’s a strategy Buona Caffe Artisan Roasted Coffee, in Augusta, Georgia, uses to build relationships with restaurants they supply, says co-owner Pat Curry. For example, Buona Caffe promotes its restaurant customers in the voting for the annual Best of Augusta poll, and shares information about the dining establishments in the cafe’s e-newsletter. They also follow their local Convention and Visitors Bureau online to find out when local restaurants have been named to best-places-to-eat lists, have won awards or have been featured in articles. “We have a very active presence on social media with more than 3,500 fans on Facebook,” Curry says. “When something great happens with one of our restaurant customers, we are quick to share that info with our fans.”
7. Offer incentives to both the existing and new customers. Money and gifts talk, and that applies when you’re looking for leads. People love to get rewarded for their referrals, and are happy to help their friends earn goodies as well. For example, KC Benain, who owns Y-CLAD, a jewelry boutique and event space in New York City, offers a free signature bracelet to any customer who refers a friend or family member who makes a purchase of $100 or more. That strategy not only gets referrals, but also helps her strengthen relationships with her customers, she says. Perkins Roofing Corporation, in Miami, Florida, offers discounts on the next service for customers who make referrals, says vice-president Tim Kanak. “Not only does this get us a new lead (with a high conversion rate), but it generates repeat business with the existing customer,” Kanak says.
8. Follow up automatically. Leah Andrews owns and runs Queen of Snow Globes, which creates custom snow globes. She uses an automated process that helps her get referrals. Every time she completes a project, she sends the client a feedback questionnaire. She asks if the client would consider referring her to someone else who would benefit from the same level of service that they received. “I find that nine times out of 10, the response to this question is ‘Yes, absolutely,'” she says. When she gets a yes, she sends a separate email to the client with an easy-to-forward offer for them to send on. “This makes it easy for my clients to support me through a referral, and doesn’t rely on them having to do all the work,” she says.
9. Show your appreciation for leads. If a customer does give you a referral that leads to new business, make it clear how much you appreciate their help. “Once a client provides me a referral that leads to a business relationship, I thank them,” says Shaw, the digital marketing and SEO expert. “I use a simple, handwritten thank you note, along with flowers, a gift basket or any small gift,” he says. A proper “thank you” can encourage even more leads in the future.
Make these techniques a regular part of your marketing repertoire, and you can generate new business without investing much time, effort or money.