So you got a Referral, now what?


So you got a referral from a Customer, now the real work begins. A referred client is no different than any other lead & it’s important to understand the key steps required to convert them into a paying customer.

Whether your business has a formal referral program, or your Customers simply refer people to you (“Advocates”), how you handle & contact referrals will directly impact the conversion of the referred client into a paying customer (the “Friend”). This post will walk through the ways to deal with referrals & what to do in order to maximize the return of your referrals.


Step 1: Setup a Plan

Establishing a plan on how you will handle referrals is needed to ensure that these valuable leads are contacted in the most efficient & effective way possible. Assign someone in your organization who is responsible for referrals. Remember, referrals can come in all forms, whether its a happy client mentioning they know someone who may like your service, a Friend contacting you directly & saying they were referred or you receive a referral through your formal referral program, having someone in charge of referrals is extremely important. Establish a minimum amount of information you require for a referral such as e-mail address or phone number so there is data consistency for each referral that comes to your business.

Step 2: Contact the Friend

There are various ways in which a Referral can occur, but this section will focus on receiving the Friend’s information either from a current customer, or from the Friend providing you their information direction.
Develop a playbook on when & how the Friend should be contacted including a standard set of questions that should be asked to qualify the lead. Prior to contacting the Friend, it’s important to note that each specific referral will have a vastly different understanding of how your business works as this depends on how much they’ve heard about your business. When contacting or speaking to the Friend, be sure to ask questions to determine their familiarity with your business and products / services. We also recommend that this set of question includes asking who referred the Friend for tracking or reward purposes.
Remember, at this point the Friend is just a lead! Referrals don’t generate you business unless they convert into a paying customer, so focus on the steps needed to convert the Friend into a customer. In addition, if you do offer a reward for any Friend who is referred to your business, ensure that you are upfront about this & explain to the Friend when and how they will receive this reward.

Step 3: Thank the Advocate

Thanking the Advocate for referring someone to your business is a crucial element to the Referral. Whether they are receiving a formal reward, or not, informing the Advocate that you appreciate their gesture will lead to more referrals & increase transparency around your referral process. A small thank-you gesture can go a long way.

Step 4: Track, Analyze, Improve & Repeat

Tracking & analyzing all of your referrals is necessary to understand the performance of referrals to your business. Whether its the number of referrals, conversion rates, who is referring their Friends, or other data, each metric can help you understand the return you are generating from your referrals.
On a monthly or quarterly basis, analyze the data and make tweaks or improvements to the process. This can include how you contact your referrals, adding or changing rewards that are offered or including a technological component to the system. Using software such as ReferralMagic to help track all of your referrals can significantly increase your conversion rate & increase the revenue you generate from referrals.


Remember, referrals can be extremely valuable to your business, so having a clearly defined strategy on how to handle them is crucial to turning Friends into paying Customers.

If you have any questions about this post or want to learn more about OneLocal’s Referral Program, you can visit this page.



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