Referrals from friends and family
Sales. I'll be honest, it's a topic I have been avoiding because its just so BIG. Instead I am going to start with a small chunk of sales - with something that greatly impacted my agency.
"People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising" ― Mark Zuckerberg
A referral is somebody referring your business to somebody else. Pretty obvious really, but the impact is huge. People are four times more likely to buy when referred by someone they know (study by Nielsen), so considering this multiplier - referrals need to be a core part of your sales strategy.
Unfortunately the word-of-mouth sales is not as popular as other methods such as online ads - but I think the reason behind that is that it's less tangible. It's easier to throw money into advertisements where you are sure your ad will be shown - but how do you encourage others to recommend your business?
“One customer, well taken care of, could be more valuable than $10,000 worth of advertising” ― Jim Rohn, Entrepreneur, author and motivational speaker
My agencies first 7-figure client was via referral. Specifically an old colleague of mine who was now working at a big boring business, and thankfully that business needed custom software. Obviously our proposal and pitch must have been pretty good - but that warm lead from someone that both knew and trusted me, I believe that was the force that helped the pendulum swing in my favour.
When I first started my agency I must be honest I got a little spammy. I sent an email to many friends and family members letting them know I was building custom software (and specifically focusing on startup MVPs at the time), and that if they knew anyone interested it would be great to have an introduction. Then a couple of years later when we pivoted into business automation software, I did the same again. Whilst this email was unsolicited, and I was asking them for a favour, I think ultimately people are happy to connect people if it's doing everyone a favour. I might be looking for more projects, but they might also know a Plumbing business who is looking for some custom scheduling software - and if they introduce us everyone can win.
I'm always going to go on about having a niche, and this is no exception, as communicating your value proposition clearly is a lot simpler if you are laser focused. You need to be clear about;
- What you do, and what you are an expert in
- What you can do for them
- Some examples of previous successes
Hopefully your website is super targeted around the service niche you offer, but if your agency is more generally focused it could be beneficial to include a tailored PDF brochure which outlines a specific niche you are targeting. If you are asking friends and family to do you a favour and refer you to potential clients, being clear is key.
An example email could look like...
Hi <name />, hope you are having a great week!
I was just wondering if I could ask a small favour, my growing software development agency <business-name /> focuses on developing high quality software for <niche />, and I'm currently looking to generate new business.
The reason for my email is I'm reaching out to some key people I trust to see if you might know any individuals or businesses in your circle that could benefit from our software development services, and could be good for us to talk to.
Areas that we focus on X, Y, and Z, and have worked with existing clients in the industries A, B, and C. We have had great success including <some example of a good outcome>. Some recent examples of our work can be seen at http://business-name.com/portfolio
If you can't think of anyone that's totally fine, but if anyone comes to mind it would be fantastic if you could share their contact information and I can introduce myself - or even do an introduction email between them and myself.
(Optional) I have attached a small PDF of our services that you could email on to anyone you think may be interested.
Thanks in advance,
<you />
Although it is a little spammy - don't be an actual spammer. Only send this to existing acquaintances you actually know and trust. Examples include
- Friends
- Family
- Old work colleagues
- Old school friends
- You get the picture
I'll give you a heads up, this is not going to generate a billion referrals, at least right away. Instead you might get many "I can't think of anything now but I will keep it in mind!". And that's totally fine, because this email serves two integral purposes:
- To get a reply that includes one or more referrals
- To plant a seed in people's heads
The seed is important, as you have now asked them directly for the favour, even if they cannot think of anyone today, perhaps when they are at that pool party in 3 week's time they will think of you when a friends wife is talking about her business needing to "rebuild their accounting system" (or whatever).
This doesn't just need to be a once-off exercise. I recommend this is something to do periodically. Don't just re-send the same email to the same people, but overtime as you meet new people and make more connections - these can be future recipients. If like my experience your business changes its niche focus, then you should re-write and re-target your email, and then you can send again to the same people. As you are now offering a different tailored service, they may be able to think of someone in their circle who could benefit from your new direction.
"Free publicity and word of mouth is probably the best and cheapest form of advertising. Learn to use it to your advantage" ― Richard Branson
Don't be afraid to put yourself out there, and don't be afraid to ask. People trust people.
My agencies second 7-figure client was also via referral - but that time the referral came from my first 7-figure client.
Referrals have always played a big role in success.
Hopefully you are sold on the power of referrals, and if you weren't already, will now think about incorporating this into your practises. If you enjoyed this article please hit the Subscribe Now button below for more insights on how to start and run a software development agency.
If you have any thoughts, feedback, or questions, feel free to reach out to me on Twitter @chrisrickard