GENERATING REFERRALS Customers Can Sell for You If you need to increase sales but can't afford a salesperson, what else can you do? Paul G. Lewis, CEO of MC2, a computer network design, installation, and support company in Warren, N.J., decided to focus his limited selling time on customers who could sell for him. Lewis started targeting law and accounting firms, which deal regularly with his potential client base. He figured that if he did a good job for them, they would mention his company to their clients and colleagues. He excelled in his service for his target firms, handed them a stack of his cards when he left, and asked them to recommend MC2. It didn't take long to see the results. Within two weeks of his first law firm job, Lewis got his first referral. That year, sales grew a whopping 700% over those of the previous year, and his sales expense was zero. Lewis's revenues have grown to $10 million since 1990. There's No Service Like Self-Service Service after the sale, if thoughtfully planned, can be a boon to your business. Glenn Meltzer, president of Health-Tech Systems, in Hauppauge, N.Y., found ways to make customers more knowledgeable and generate excitement about his new products. He also increased referral business in the process. Meltzer provides turnkey computer systems for dental offices. After he had sold a number of systems in Philadelphia, phone queries began to pour in. In response, Meltzer convened a group of customers to address common problems, and the participants decided to form a user group. The payoff was so great that Meltzer has since formed similar groups, in eastern Massachusetts, Long Island, Rhode Island, Washington, D.C., and Richmond, Virginia. At each session, group members share ways to better utilize their systems. They also begin to call each other--rather than Health-Tech--when problems arise. Meetings soon take on the spirit of a self-help group. The group costs Meltzer very little: some minor travel expenses, postage for a few letters, and a bit of time. And Meltzer has found that it generates another unforeseen benefit. "As a result of the user groups, we're selling many more upgrades," he says. Furthermore, Meltzer says, the company is getting new sales because of the groups. When group members socialize with their peers from other offices that are not yet computerized, they often talk positively about Health-Tech. Get Business to Come to You Ask most service providers how they get business, and the answer is "referrals" or "word of mouth." Carter Prescott, head of New York-based Carter Communications, which provides high-level writing and speaking services for Fortune 500 clients, doesn't even have a listed phone number. "I've never needed one," she says. "It's better to have people call you on their own, rather than soliciting calls anyway. You get a better client that way." True, but you still have to work to generate referrals. Even your most loyal customers aren't likely to think about generating business for you -- they've got their own fish to fry. So try these surefire methods to build your word-of-mouth business: Offer incentives for referrals that turn into business. They can be in the form of discounts on future business, free estimates or samples, or just plain cash. Even a small offer will catch their attention. Create a referral form, and send it to clients or customers with your invoice for services rendered. If you've done a good job, the time to leverage yourself is upon completion of the project. Tap your suppliers for leads, by reminding them that when your business grows, theirs does, too. Spark this exchange by giving leads to your suppliers. Ask prospects who have turned you down for referrals. This gives them a graceful exit from a potentially unpleasant task. The only secret, as with any request, is to time it appropriately so that you offer people a natural, unforced opening to help you. Derby Management 399 Boylston Street, Boston, MA 02116 Tel: 617-292-7420