SALES & MARKETING By Sharon Davis
5 Ways
to increase customer referrals
The cheapest and most effective form of advertising for any business is a referral from an existing customer. Sharon Davis highlights five effective ways to increase referrals – and your bottom line.
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eferrals from satisfied customers are an important source of new business for brokers in the mortgage industry. Customer referrals account for about 70% of all new business for a significant number of leading brokers in New Zealand – and may be the single most important source of new business. It is easy to see why. That personal recommendation from a friend, colleague or acquaintance helps to build trust and does a lot of the hard selling, before the client walks through the door – with little or no cost to the broker. And the referral is usually made when the potential client has a need, providing brokers with a customer who is looking for his or her services now. Most brokers interviewed by TMM rated customer referrals as “highly important”, “hugely important” or “absolutely critical”. Ajay Kumar from Global Financial Services Limited in Auckland is one of several brokers who generate 70% of new business from customer referrals. He rates these referrals as “most important” because they are low cost, but produce the best results. Brokers also said that they rely on customer referrals to an increasing degree,
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as their business reputation and customer base grow over time. Bruce Patten from Loan Market in Auckland says: “Without word-of-mouth referrals, we wouldn’t have a business.” Early on in his broker career referrals from real estate agents accounted for 70% of new business, “however, as time has gone on it is word-ofmouth referrals that account for 70% now”. Mark Puller from Roost Mortgage Brokers in Arrowtown has also become less reliant on referrals from estate agents and other industry professionals. “The vast majority of referrals are now from my existing client base,” he says. Auckland-based David Windler from The Mortgage Supply Company agrees: “The longer you are in the job [as a mortgage broker] the more referrals you get. The trust has already been handed on – you don’t need to convince them to deal with you.” “Word of mouth referrals have become my most successful source of referrals. This was not always the case,” says Jason Hurdle from Beyond Mortgages Limited. Customer referrals now make up 40% of his new business. So how do you increase customer referrals and grow your business? Here are five keys things to do to ensure that your business flourishes.
Provide an exceptional service
➊ The most effective way to get your
customers to talk about your business, and to refer your services to their friends, is to provide an exceptional service. It is fairly obvious that people will only recommend a good service, but they are also far more likely to remember, and recommend, someone who provided a service the exceeded their expectations or provided additional value. “Word of mouth referrals are the best referrals you can get,” says Wellington-based Hurdle. “They only come about by you going that extra mile for a client. People refer you because of that value you add, not because of a cash referral fee.” To provide an exceptional service you will need a thorough understanding of the mortgage industry, have up-to-date market information at your fingertips – and to put all that to good use, in the best interests of your clients. In addition a focus on customer service can also help to bring in much-wanted referrals. “I have a customer care manager as a part of my team to ensure that we give our clients the best possible service and follow up. We also have a referral programme for our clients because we see this as extremely
