Your best source of new customers during tough times is your list of old customers. It's as though you live next to a bountiful gold mine, owned entirely by you -- but you never take a single nugget, and you consistently bemoan your lack of profits.

A sad scene, yet one that is repeated daily in every nation on planet Earth. This shouldn't happen to you -- but the chances are that it does, and this lesson is devoted to stopping it.

The bountiful gold mine is your customer list. On that roster of wonderful people are the names of customers who know other wonderful people, poised and ready to get onto your customer list themselves. All they need is a gentle nudge. And who do you think is the chief nudger?

You are -- if you're a guerrilla. If you're canny enougth to know that the richest source of new customers is old customers, then you're ready to mine that list for names that will be forthcoming -- and on a yearly basis at that -- if you simply ask for them. Is it that easy? You betcha.

The man who lead the nation in insurance policy sales a few years ago was interviewed, focusing upon his astounding success -- because he sold twice as many policies as the agent who finished in second place.

He explained that as soon as his client would sign on the dotted line, this agent would reach into his attache case and withdraw a large memo pad. In the presence of his new client, he would write numbers on a blank page: 1, 2, 3, 4 and 5. Then, he'd ask his client for the names of five people who might benefit from a policy such as the client just purchased. The client, feeling positively, almost always furnished the names. Five isn't an unreasonably high number, plus it's nice and specific.  

Guerrillas learn a lesson from this example. So they put into writing a guerrilla referral program. How do you get such a program to work? Four steps:

1. At the time of the initial purchase, ask for the names of five people who might benefit from the product or service your customer just purchased.

2. In six months, send a brief letter reminding that you know the importance of customers, then asking for the names of three people who could benefit by doing business with you. Provide a postpaid return envelope.

3. A year after that, ask for the names of four people who could gain by becoming your customers. Perhaps this time you'll send a little gift, whether or not the customer furnishes names.

4. Once a year, for as long as you're in business, ask your customers for the names of three, four or five people who might gain by becoming your customers. Because of your guerrilla follow-up, expect a healthy response.

When it's appropriate, ask if you can use the name of the customer when contacting the prospect he or she recommended. Talk about door-openers! Thank the customer for taking the time to provide these valuable names. This guerrilla referral program is simply common sense, yet how can you explain the absence of such programs at most Australian businesses?

Think there might be a connection between high business failure rates and few referral programs?

Guerrillas know that it now costs six times more to make a sale to a prospect than to an existing customer, so they do everything in their power to increase the size of their customer list, then market with guerrilla gusto to customers and acquaintances of customers. Just realize that along with the repeat business of customers can come a gold mine of names of future customers. Be sure you stake a claim to your fair share of nuggets.  

The cost of an active referral program is tiny compared with the potential for profits such a program can mean. The best way to get the names of new customers from old customers? Simply ask for them.

As a guerrilla, you've been staying in touch, so your customers want you to succeed and will happily comply with your request for, say, three names. Ask for them, provide a postpaid envelope, and you'll soon see this tactic is pure gold. There are other ways to tap into your enormous referral power:

* Identify potential references. List everyone with whom you have worked in the past three years, and others who know you well.

1. Note on your list what you would like a reference to do. There is more than one kind of reference: use of their name, calls for you, and written testimonials. Be specific. Think especially of what you would like past customers to say. You’ll be surprised at how willing they are to say it.
2. Ask pleasantly. Asking politely generates good references. Everybody understands the need for a business reference. It’s a reasonable thing to ask for. If properly asked, most people will applaud good work.
3. Request name use. First, phone and ask the potential references if you can use their names -- either in talking with a potential customer or on your company brochure. Allow them the chance to say no. 
4. Get telephone references. You can tell by people's voice tones if their references will be good. If references agree to your using their names, ask if they will take phone inquiries. Create a stable of references who will speak highly of you when called.
5. Obtain a letter. If the telephone reference is better than average, ask for it in writing. Tell the reference that a few short words will do, such as, "Ms. Atwood's service was outstanding. We intend to use her on 90% of our future jobs."

Why don't people give more referrals? Because they're afraid you'll foul up and they'll be blamed. Guerrillas continue to develop new customers all the time because know they’re losing old customers all the time:

1% of customers die.

3% move away.

5% develop other business relationships.

9% leave for competitive reasons.     

14% are dissatisfied with the product or service

 68% leave due to an indifference on the part of an employee

The way around these irrevocable statistics? With a referral program that is active, alive, constantly used and part of the way you run your business.

Action Steps:

1. Look at your customer list and realize deep in your heart that it's your most precious business asset. Used properly, it can lead to untold profits…and with a minimal investment on your part
2. Create a referral program in writing. It should call for you to contact these customers on a regular basis -- not merely for follow-up marketing, but with the purpose of getting names of potential future customers. This is especially easy with email.
3. Actually write the letter you will send to customers, the letter that asks for the names of people who might benefit from doing business with you.
4. Select five customers you will call by phone to secure the names of people who are potential customers. Call them and tell them that you'd appreciate these names as a way of holding down your marketing costs. By seeing how simple it is to get names, you'll be motivated to call more customers -- or ask one of your employees to do it for you. Hint: it helps the most if you are the one who makes the call. 

If you'd like to speak to Bruce Doyle 'Global Guerrilla Marketing Master Trainer' and the Team about 'Your' Marketing Apply for a Complimentary Strategy Call where we'll conduct a Marketing Audit for You.

About the Author

Bruce Doyle

Pioneer of the Business Coaching Industry in the late 90's, Guerrilla Marketing Master Trainer (personally mentored by Jay Conrad Levinson)

Global Business Coach of the Year Hawaii 2003, Author of 4 Business Books, Entrepreneur and Founder of UnlimitedBusiness.com

Bruce has worked with 1000's of Business Owners over the past 20 years plus he's owned and operated over 30 Businesses across a range of industries. His focus is teaching business owners how to dramatically GROW PROFITS and GET MORE FREEDOM IN THEIR LIVES.