Ask an MSP Expert

Q: We ask our customers for referrals on a yearly basis—usually after they renew their contracts. We’ve found this process to be very helpful in scaling our IT service business, but we’re looking to ramp up our outreach. What are some additional ways to get referrals—without asking?

Asking for referrals can be difficult, and most IT business owners are hesitant to ask. (For tips on how to ask for referrals, check out last week’s post: How should I ask SMB customers for referrals.) However, advocacy programs can be a great way to encourage customers to share referrals with your IT service business. In a study conducted by Heinz Marketing, it was discovered that companies with formalized referral programs experienced 86 percent more revenue growth over the past two years, compared to those without a formal program.

To help you uncover additional ways to gain referrals, we consulted with Stuart Crawford and Lindsay Faria. Stuart is the CEO and creative director for Ulistic, and he routinely works with managed service providers to help them achieve business success. Lindsay is the director of partner marketing at Barracuda MSP, and she works on tools and programs to help their IT partners develop better business practices. You can always ask for referrals, but Lindsay and Stuart shared four creative ways to generate more referrals from your current client base.

4 ways to receive referrals (besides asking)

Your network is larger than it may seem. In fact the average CEO has 930 LinkedIn connections. To really get the most out of your network and to grow your client base, here are four areas you can explore.

Engage your fans with Partner Advocacy Programs. Advocate marketing is a great way to communicate with your number-one fans and solicit their feedback. You may want to consider using a third-party platform which creates a forum for your customers to engage with your business and to help amplify your company’s reach. However, it’s important to remember that advocacy is a two-way street, Lindsay explains. Leveraging customer advocates isn’t just about getting referrals, it’s about strengthening relationships. So, make your customer interactions personal and memorable, and balance your “asks” with plenty of “gives”. Add value to your customer advocates through education, periodic perks, and even giveaways—and be mindful that you aren’t just taking their money and referrals.

Some clients might not have any referrals to share at a particular time —and that’s okay. What they might be willing to do is indirectly refer you by providing a case study, talking at an event for you, giving a testimonial, or writing an online review. Advocacy happens in many different shapes and forms, so if a satisfied customer declines to refer a specific prospect, they might be willing to promote you in another way.

Receive more referrals by starting a Bird Dog Referral Program. Stuart shares that when he helped run an MSP they ran a bird dog program. “How it worked was, I would network with other people who sold into the same market I did,” he explains. “For example, I would work with cell phone guys who sold at the corporate level, printer sales people, and even software representatives—mostly in the oil and gas industry. I knew the sales guys who were going to talk to oil and gas companies, other people in the industry that I wanted to work with. If they got me a meeting, I would pay them a small commission just for arranging the meeting. If I was successful in closing a contract, I would pay them for the first month of the managed service agreement value. So, say for example I close a $3,000-a-month managed service contract, I would cut them a check for $3,000.”

Stuart says this approach worked well for sales-motivated individuals. But, not everyone is driven by money, so his MSP looked for other incentives that they would respond to. People get enough Starbucks gift cards, iPads, and flat-screen TVs, so Stuart suggests giving them an experience like football tickets and creating a memorable gift instead. Some industries aren’t allowed to accept gifts, though. If that’s the case, make a charitable donation on their behalf to an organization they hold near and dear to their hearts. After all, 75 percent of people are humanitarian-driven. In the end, you spend the about same dollar amount as it would have cost to get that lead another way.

Extend your reach with social media. MSPs that get referrals on LinkedIn strategically outperform those who don’t, Stuart points out. Businesses that have a strategic outlook on LinkedIn and understand how it works are seeing the fruits of their efforts and uncovering more opportunities. But, even on LinkedIn, getting referrals starts with asking. “You might be tied to an organization that I want to know, but if I don’t ask you if I can use your name in conversation or ask you to facilitate an introduction, I’m never going to get that opportunity,” Stuart explains. Don’t be afraid to ask.

With social media, encourage customers to engage with your business accounts, Lindsay suggests. Not only will they stay up-to-date with you;  but they could connect you with your next  new customer. They likely have connections that could benefit from doing business with you. Seeing positive customer interactions, thought leadership, and ideas about a particular industry can give prospective clients a feel for your industry expertise—and it make them more open to future conversations.

Make the word of mouth go further. Word of mouth is very powerful, and unsolicited referrals are the best referrals, Stuart says. “Every now and then, I will get phone calls, and people will say ‘Fred said you are the go-to guy for this piece of technology.’ But, when I get off the phone, I think … who is Fred? That kind of thought leadership and being the go-to person is very powerful, and the only way to achieve that is getting out and being known in your community.”

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That could mean getting known in your industry or in your local area. Stuart explains that his MSP was known in the oil and gas industry as well as around Calgary. “We went to every chamber event,” he says. “We became friendly with a lot of people in the business community, and we volunteered to help clients at their events. One event that we went to every year, I would volunteer to go there and help my client, Peter, with the laptop and the projector. Whenever you are presenting in front of a room, something always goes wrong with the equipment. Having me there allowed Peter to focus on everything else.”

Actions like this fuel the word of mouth. “A lot of other MSP coaches and marketing professionals will tell you that word of mouth will eventually die out,” Stuart says. “But, if you do your job properly, continue to respect those who work with you, and service your clients the best you can, word of mouth will never dry out.”

If people really like your service, they will refer your company to people without any expectation of return, and often saying thank you is enough, Stuart shares.

As with any referral, saying thank you is the most important part. If you don’t show your appreciation, customers will be less likely to share a contact in future conversations or when the need arises. “People are naturally inclined to help people who have helped them, so don’t be shy about referring leads to your customers when it makes sense. This may encourage them to return the favor down the line,” Lindsay reminds. By following this advice you can extend the reach and receive referrals in new and different ways. To learn how to ask for a referral, please visit last week’s post: How should I ask SMB customers for referrals?

Photo:  Brian A Jackson / Shutterstock.

Lauren Beliveau

Posted by Lauren Beliveau

Lauren is an Senior Content Marketing Specialist at Barracuda MSP. In this position, she creates and develops content that helps managed service providers grow their business. She also regularly writes The MSP’s Bookshelf and our Ask an MSP Expert column.

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