Home Advertising Small-Business Founders Explain How to Grow Your Company With Referrals

Small-Business Founders Explain How to Grow Your Company With Referrals

  • Asking clients for referrals is an easy way for small businesses to market themselves.
  • Clients referred by their friends or family are often a better fit for your products or services.
  • Consider offering incentives such as discounts in exchange for a referral.
  • This article is part of “Marketing for Small Business,” a series exploring the basics of marketing strategy for SBOs to earn new customers and grow their business.

When Michael Nova started his event-planning business in New York City in 1995, he had no advertising budget. He asked his friends to spread the word, and the company took off.

“Everything was word of mouth,” Nova told Insider. “It was just friends, and friends of friends, referring each other.”

Nearly 30 years later, Nova Custom Printing offers custom branding, marketing, and design, and works with many major brands, including BMW, L’Oréal, and American Express. Nova attributes his company’s growth and longevity to doing good work, networking, and building relationships.

“The greatest advertising you can get is when one person tells another,” Nova said. “There’s nothing like it.” 

Referral marketing, where businesses ask their customers to recommend them to others, is a low-cost way for small companies to expand their client base and grow brand awareness. In a 2021 Nielsen survey of consumers, more than eight in 10 respondents said they trusted recommendations from people they knew over other marketing channels.

Here’s how two small-business owners seek out referrals and have used them to generate leads and build their businesses.

Focus on doing a good job

Kirby Wilkerson’s sister was her first client when she launched her public-relations agency, The Impact Kind, in 2020. Wilkerson helped her sister get national media coverage for her business, and afterward, friends reached out about Wilkerson helping them, too. 

“First, it was seeing what we do,” Wilkerson, who lives in Michigan and works mostly with company executives and small businesses, told Insider. “Then, referrals are what catapulted our business.” 

Referrals helped her more than double her revenue, she said. The volume of new client requests led her to create a wait list. 

Getting referrals depends on not only offering and delivering a quality product or service but also “exceeding expectations,” Wilkerson said.

“When people are happy, they’ll naturally refer you,” Nova said. “Our focus as a business has always been on treating people as you would like to be treated yourself.” 

Connect with your ideal clients 

Referrals can reduce the time you spend pitching your company to prospective clients, Wilkerson said. 

Clients who are referred by friends or family are often a much better fit for your business than customers who simply find you online, she said. 

“It’s so easy, and it’s meaningful because somebody liked your work enough to say, ‘Hey, this is worth the money,'” Wilkerson said. 

Consider offering incentives 

Wilkerson offers a discount to any referral who becomes a client. And the client who referred them receives a small percentage back on their campaigns each month for a period of time, depending on the project. 

“Even though it’s not a lot of money, it doesn’t matter,” she said. “What’s more important is that you stay on a client’s mind.”

In fact, Wilkerson said she believed many clients would continue making referrals and staying connected without incentives.

Ask for referrals naturally  

After completing a project, Nova follows up with the client to make sure they’re satisfied and discuss how they may work together in the future, he said. He also asks them to recommend him to others.

Wilkerson sends referral emails before a project is completed, keeping the tone friendly and asking clients whether they know anyone looking for a similar service.

“Thank them for their business when you’re asking for the referral, and then thank them again for giving the referral,” she said.

Asking for a referral may feel awkward and uncomfortable at first, but if you’ve built trust with your customers, most are happy to do it, Nova said.

“It really boils down to building long-term business relationships,” Nova said, adding that those connections had been the “lifeblood” of his company.

“We strive to become an ally to our clients,” he said, “making ourselves invaluable resources for them.”