Testimonials and referrals

The power of endorsements

Testimonials and referrals are types of endorsements and are powerful marketing tools because they are credible. Everyone expects a business to say that it has excellent products, a great team and really delivers top-quality service. But when a customer says the same thing, it’s a much more convincing statement – particularly if the customer is known and their opinion is valued.

The built-in credibility of testimonials and referrals makes them more persuasive than almost any other kind of marketing. Even in industries that invest heavily in marketing to promote the features and benefits of their products, many customers will still seek opinions from friends, acquaintances and associates before they buy.

Entrepreneur.com reported an Internet survey of businesses, finding that two-thirds of the participants received over 70% of their new business through referrals and word of mouth. Depending on the type of business you are in, you may also be getting a significant proportion of your business through referrals. This means that increasing the frequency of referrals can have a dramatic effect on your bottom line.

Endorsements are particularly important if you are in a market where people are naturally wary about making a purchase – for example, if you’re a new business, a new industry or you’re selling big ticket items, where people literally can’t afford to make a wrong choice.

Suppose you’re a house builder - you’ll be involved in one of the largest investment decisions people will ever make. They need to be absolutely confident that you won’t take shortcuts, use defective materials or be distracted by other projects. Endorsements are a key way to win that confidence and convince customers that you are the right business for them.

Endorsement Is underutilised

And yet, although referrals are one of the most important selling tools you have for growing and expanding your business, they are almost always underused. Why are salespeople, and everyone in business ought to be a salesperson, so reluctant to ask for referrals? There are several reasons, the three most often cited being:

• Fear of asking for one, or feeling uncomfortable about doing so
• Don’t know how to put the request to a customer
• Feel that ‘their work speaks for itself” and satisfied clients will be out there recommending them without needing to be asked to do so

Well, if you don’t ask you won’t receive, so today we’ll look at:

• How and when to ask for testimonials and referrals
• Getting a testimonial to say the right things in the right way
• How you can use testimonials as part of your marketing materials
• How you can increase referral rates through better networking

Testimonials - don’t be afraid to ask

Let’s start with testimonials. Testimonials are not as hard to get as you might think. For example, you might receive a glowing letter of appreciation from a customer. There may be a paragraph that you would like to use in your marketing material. Or perhaps you’d like to frame the letter and put it on your wall. You simply need to ask the customer if they are OK with you doing this.

It’s very important that you do ask. You could offend a client if they find that their private business correspondence has been used for a public purpose. If you get permission, you’ll also be confident that the endorser will be happy to field occasional phone calls about your product.

The bottom line is that if you have provided service and value, then you’ve earned the right to ask. And if you have earned the right to ask by providing a superior service then the answer is likely to be ‘yes’ rather than ‘no’. Another way of looking at this is to consider that by providing a testimonial, or a referral, your customer is actually going to be doing other customers a favour - they will benefit from your services also.

Strike while the iron is hot

The best time to ask for a testimonial is soon after a sale when the purchaser is excited that they have bought something that they really like. If it’s a major purchase, you might have made a follow-up phone call just to check that they are not having second thoughts - this is good practice anyway.

If the customer is particularly enthusiastic you can say, “That’s really great to hear. That’s just the sort of feedback we love to get and it makes it worthwhile being in business. It’s also the sort of response that can help us a lot. Would you mind if we quoted you on that?”

Get the right endorsement

But now, how do you get that quote so the enthusiasm comes across? For example, if you asked a person to verbally comment on the service they’ve received from your business, they might say:

“Look, I just couldn’t fault it. It was fantastic. The products and services we’ve purchased have really delivered. The team there is great to deal with, too, and we haven’t looked back since working with you people.”

Now imagine you said to that customer, “Oh, great, thanks for that. I’m really glad to hear it. Would you mind writing that down on paper for me?” You’d probably get a letter that said something like this:

‘To whom it may concern: We began working with Business X approximately 14 months ago. Since that time, the service we have received has been above average. The team at Business X provide satisfactory advice also”.

You can see the marked difference. And that’s simply because people just don’t feel comfortable writing the way they speak, even though it’s far more powerful to do so. We’ve been trained for years to think that the written word has to be more formal. As such, you lose the power of that fantastic endorsement.

‘Interview’ the customer

Given that, the best method for capturing testimonials from current customers is to simply call your happy customers - those you have a good relationship with - and ask over the phone what they think, ‘in their own words,’ of the service they receive from your business. As they express their feelings and comments, and since you know which points you would like to be emphasised, don’t hesitate to prompt the customer with some questions: “How do you feel about the way we did this….what do you feel about that…?”

Ask some open-ended questions - the responses may give you some unexpected good news about how you are connecting with customers.

You can conduct the ‘interview’ over the phone or in person. Make sure that the other person understands that you are going to write up your notes in a few paragraphs and when you have, email them back for clearance. Tell them to feel free to make any changes they like. That way they won’t worry that they are being misrepresented or that you are trying to railroad them.

• Why do you deal with us? What's the main benefit?
• When was the last time, if ever, that you used one of our competitors?
• What has been the most enjoyable part of your experience in dealing with us so far?
• Did you have any problems or concerns that were not addressed?
• If you had to say in a brief sentence what the very best thing about us is, what would it be?

Use a skilful writer

If you don’t feel confident in your own writing ability (and many of us are not natural writers) then you can send a professional copywriter around to talk with the client for ten minutes. Find someone who has a track record in writing marketing material. Or if you don’t want to pay for a writer, there may be someone on your team who has a flair for writing good marketing material, but a professional can usually turn the nice blurb you might start with into something that really sells.

Video endorsements

You may not even have to write the endorsement at all. You can video it. You can use a digital video camera or quality phone to get a short interview with your endorser, edit the interview down to a few key comments and then load it onto your laptop. Then, when you encounter sceptical clients at a sales meeting, you can turn the laptop towards them and play them a few choice sound bites about the demonstrated quality of your business.

You can also include a testimonial page on your website. You can use either still photographs with some brief text or you can have a short video file.

If you want to use a visual approach, make sure that your pictures identify the speaker - a video won’t bear a company letterhead. So you might want to make sure that their company logo is visible somewhere in the film.

Some people are camera-shy and it may be hard to get them to talk before a video camera. Other people of course are just naturals. You’ll have to use your judgment about who to approach.

When asking for any kind of endorsement, don’t push if the person seems at all reluctant. If there’s any hint of coercion you can damage your business relationship and may even create bad word of mouth.

However, you may point out to camera-shy clients that they also gain marketing exposure if you have a good video or photograph of them in the right setting.

‘Celebrities’ as endorsers

You don’t need to restrict the source of testimonials to customers alone. You may want one from a local ‘celebrity’. Celebrity, in this case, does not necessarily mean someone who is on television or radio. It can just as easily be a prominent figure in the local business community. The key thing is that the endorser is known and trusted. You may get more credibility from endorsements by business identities since people will be confident that they haven’t been paid to offer their opinion.

Magazine endorsements

If you have a genuinely new and exciting product it may actually be a news item and an industry magazine may be happy to do a write-up on it. This can give you a huge boost since the magazine will probably have a readership of people who are connected with your industry. But beware! A magazine review is not automatically a testimonial. The magazine may give you a mixed, or even bad, review. So you need to be confident before you decide to, for example, hire a PR agent or start sending out news releases or product samples to relevant magazines.

Endorsers are referees

If people offer you a testimonial then they are acting as de facto referees. So it’s good if they have been in recent touch with your business and can comment if somebody rings them to ask about their testimonial. Naturally, you want to have absolute confidence that your endorser will only say good things. That’s another reason for not pressing too hard for a testimonial - you don’t want testimonials from people who have any reservations. So just keep in mind that if you want endorsements you have to be the sort of business that deserves them.

People will not offer you a testimonial if they haven’t received a quality product or service and great service themselves. It’s not just that they would consider it dishonest; it’s also because they stand to lose credibility if you fail to perform. So you need to be offering great customer service before even considering asking for an endorsement from a customer.

Deal effectively with complaints

You also need to institute really good complaint-resolution procedures. That is, you need to go out of your way to not only resolve complaints but also surprise and delight customers with your responsiveness.

Have your team apologise promptly when there are complaints. Treat complaints as a valuable source of information on how you can improve your business. Be glad people came to you rather than simply passing the complaint on to their friends. When people complain, go out of your way to resolve the complaint and more than compensate for any inconvenience to them. That way you demonstrate how important their business is to you and you may strengthen the relationship you have with them.

You can also seek out complaints that might never be made to you. If you make post-purchase calls to clients you can minimise the chance that customers will regret making a purchase and pass that disappointment on to their friends. The flip side of seeking endorsements is to minimise bad word of mouth. Work hard at this, as people are much more comfortable spreading criticism than praise.

What is the shelf life of a testimonial?

How long do testimonials remain effective? That can depend largely on who was providing the testimonial. For instance, if it was an executive of another firm you need to ask if the person and their company are still well respected in their industry. You’ll need to keep tabs on this.

The real question is whether or not the testimonial is still working as part of your advertising or marketing campaign, that is, is it still effective? Remember the credo ‘What you can measure you can manage’ – well, this goes for the testimonials you are using also, though it may only be possible to do it indirectly. But at times you will need to consider whether you have used the testimonials so often, in so many media, that they are no longer generating sales or leads. As long as ads and marketing media featuring testimonials are still working to achieve the marketing goals you set there is no reason to switch tactics. If you are not making those goals you’ll need to think about introducing new testimonials as part of a new marketing plan.

Network for referrals

Both testimonials and referrals are supported by good word of mouth. Word of mouth tends to have a life of its own, but you can boost word of mouth by actively networking. You probably do this already, through memberships of professional or trade associations, or by your membership of community groups such as Rotary or Lions.

You could also join one of the dedicated networking organisations such as Business Network International. In dedicated networking organisations, members refer business to each other. BNI members join local chapters, but only one business of any particular type is allowed to join any one chapter. BNI is typical in claiming that only quality businesses are allowed membership. To achieve this, the business applying is vetted before being admitted and any referrals leading to poor quality work are investigated.

Membership pays

Research by Ivan Misner, author of The World’s Best Known Marketing Secret, found that the key to getting referrals through networking organisations was to stay a member for a significant time, as the size and number of referrals appear to increase dramatically for each year of membership. For example, Misner found that in the first year, around half the members had a figure of $360 or less for their largest referral. In the second year, the amount jumped to over ten times that.

Many intervening variables affect this including such things as length of membership, the business you are in, your years of experience, and your level of participation. In general, this form of networking, though it can be very slow in the short term, is claimed to be remarkably effective in the longer term.

Ask satisfied customers for referrals

Dedicated networking organisations are not the only way to get referrals. You can get them in the same way you get testimonials. When customers tell you how great your product or service is, tell them you’d be happy if they passed on the good comments to any friends who might also be in the market for what you provide. Or you might ask them if they know of anybody you could contact and offer business to. If your client is sincerely happy with your service, they’ll say ‘yes’ and may suggest that you mention their name when you call.

If your client can’t think of anyone off the top of their head, and if you think it’s appropriate, make a note to phone them or raise the question again the next time you talk. However, remember not to push. You don’t want a referral from anyone who doesn’t sincerely want to offer it. Such a referral can backfire.

A low-key approach can also generate referrals. You can get results from a sign on your wall, saying ‘We appreciate your referrals’, or a note on your website.

Offering fees for referrals

The way you go about generating referrals will depend partly on the kind of business you are in. In some businesses, it’s against the code of ethics to actively solicit testimonials and referrals. In others, it’s not only okay, but some businesses pay incentives or spotter fees to people who bring them new clients. The downside to paying spotters fees is that you can be setting up potential conflict. What do you do if someone refers a customer to you, but they turn out to be inappropriate because they don’t represent sufficient lifetime value or whatever? Do you still pay for the referral?

The other problem with paying for referrals is you don’t want to be seen as offering a bribe. That can poison a client relationship.

Rewarding referrals with gifts

To avoid this, you can reward people who have sent you good customers with gifts or gestures that you know they will appreciate, but which have a low monetary value. A handwritten thank you note can show sincere appreciation and can be a way of strengthening a business relationship. You can take clients out to lunch from time to time as a token of your gratitude. You can phone to say thanks for some recent referrals. Or you can buy a gift that you know fits in with a special interest of theirs. It might fit into a hobby of theirs, or you could buy tickets to a movie, sporting event or show you know they’ll like. If you want to show monetary appreciation you can offer them a discount from time to time.

Generate referrals by giving them

You’ll find that you can generate referrals by giving referrals. But remember, make sure you only offer referrals to businesses you trust, as you’ll suffer if you offer referrals to poor-quality businesses. Once you’ve given the referral, check up later with both parties and see what the result of the referral was. That way you stay in touch and that helps cement your relationship. The closer your business relationships, the more likely you are to get referrals.

You can also create a strong image of integrity if a client comes to you with a job that’s not quite right for you, and you say, “Actually, I know someone who can help you better than I can in that particular area.” When you clearly put the client's interests before a chance for immediate gain you show you have confidence in your business and you demonstrate a firm commitment to customer service. Offering a referral can generate trust and may win you more business in the long run as long as you remember to refer to other businesses that offer quality products and good service AND don’t cover your core business items!

Ways to stay in touch

Stay in frequent touch and make sure that your clients remain aware of you. You’ll never generate referrals if clients have to look through their diaries to remember who you are and what you do. You can stay in touch in several ways, such as:

• Newsletters
• Letters
• Special offers
• Gifts
• Client only events
• Cards
• Flyers
• Seminars

Generating referrals indirectly

There are also more indirect ways of generating referrals. For example, you can provide vouchers that customers can give away to their friends. If you’re a services business, you could make the vouchers redeemable at times when you’re not busy so as to lessen the impact.

Similarly, you can host events where you invite clients to bring along friends. For example, if you’re a retailer, you could have a closed-door sale, where your clients are ‘privileged’ to bring along a certain number of friends.

Or if you were a builder you could throw a party on the completion of a new house. You’d have a marketing presence at the party, which would be a way of showing off your work and networking with prospective clients.

Raise your profile

If you’re in the professional services area, your code of ethics might prevent you from directly seeking referrals. But you can generate referrals indirectly by speaking at industry events, seminars open to the public or on the radio. If hundreds or maybe even thousands of people hear you speak authoritatively, there’s a good chance you will come up in the conversations of at least some of those people.

People will have more opportunities to make referrals if they are aware of your full range of products and services. So make sure your marketing showcases everything you do. And don’t forget to include testimonials in your marketing materials.

Form business alliances

You can win referrals by gaining access to the customers of other businesses. For example, you might reach an arrangement where you swap advertising space on your websites. Or you might reach an agreement with a supplier or client, where you send out a piggyback mailing. When they send out their invoices, letters or marketing, they’ll include a flyer, offer or newsletter from you. This can be particularly effective because you’ll be reaching people in the same industry sector as your own. The clients of your client may well be the sort of people you want to do business with.

Conclusion

The main thing to remember about referrals and testimonials is that they are based on truth. If you consistently make your customers happy, then they’ll be pleased to give you testimonials and refer you to others. They’ll think they’re doing their friends a favour by putting them on to you. So the first step in gaining endorsements is to ensure that you are providing service or product at a very high standard yourself.

If you have this base of quality, you can use a variety of networking techniques to spread the good word. Pick the right moment to ask for a testimonial. Work methodically through business networking groups. Create a schedule for events that will allow you to meet the friends and clients of your clients.

Having established a sound basis of quality and reliability, you can use testimonials and referrals as a way to create effective marketing that is highly credible and will provide real growth for your business.