Over the past few months, we have been doing a good deal of analysis of the more than 500,000 interviews we have in our database. We are trying to glean as much as possible from this trove of information and learn how excellent customer service impacts other behaviors.  We are particularly interested in the linkage between excellent customer service and referral behavior. I want to share some of our findings that apply to many businesses.

For all of our clients, we ask the Net Promoter question (willingness to refer). For most we are following up this question with “Over the past six months, have you given a referral for our client?” Some fascinating findings include

  • Around one-third of the people interviewed indicated they had referred. The rate of referral ranges from a low of 28% of people interviewed to a high of 39% (by client and type of business).
  • Consistent with the findings of Fred Reichheld and others involved in the Net Promoter Score, 91% of those who gave referrals were Promoters (rated willingness to refer as a 9 or 10).
  • Those respondents who called out an employee or department for  a job well done were far more likely to give a referral.
  • There are customer companies that are “hotbeds” for referrals. For example, our research showed customers at a single company gave 8 or more referrals in a year, most all by different people. This example was one of many!

Some conclusions.  First, there may be far more referral activity by your customers than you think. Don’t assume this activity is not happening. It may be! Second, if you discover a customer referral, thank the customer. A simple thank you note goes a long way. If your penmanship is better than mine, handwrite it. I know it sounds old fashioned, but it stands out.

If you want your customers to refer your service, your service has to be first-rate (91% of referrals come from Promoter customers). Work on making customer service the best it can be. The fact referring customers single out employees for recognition at a statistically higher rate than non-referring customers shows the power that a single employee can have on the customer experience.

If they take those few extra steps that cost little or nothing, the payoff is potentially significant. Be sure these employees are recognized. Recognition does reinforce the behaviors you want to see in the service area.  The last point to make: A referral can often be extremely valuable.  Think about your customer service as a key element of your marketing plan.

If you would like to have a summary of some of our critical findings, send me an email.

Lynn Daniel

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