We make no excuses for banging on (a lot!) about AI – it’s an incredibly important topic.

In this week’s blog, however, we’re going back to basics to explain how one firm we work with increased referral numbers by 136%.

No matter how far AI robots advance into our lives, we can see nothing happening that’ll stop referrals and recommendations from existing clients from having the highest conversion rate and the lowest cost of acquisition. Combined, those two things mean they’re the best type of new enquiry.

Unfortunately, in our experience, very few firms maximise the opportunity.

The majority do nothing to encourage clients to refer and recommend them. A few will ask for referrals, but that risks alienating clients.  Almost none have a comprehensive strategy based on client appreciation, communication, and education; training clients on whom to recommend, when to do it, and how to do it.

It’s the first on that list, client appreciation, that we’re discussing today, explaining the three points to show appreciation to an existing client for their referrals.

#1. When the recommendation is received, send a handwritten thank-you card

You could send an email to say thank you. You could pick up the phone. However, the advantages of a handwritten card make it the better choice.

Firstly, it’ll stand out; when was the last time you received something handwritten in the post?

Secondly, it taps into effort bias, where people attribute more value to something that took more effort.

At this stage, many of the firms we work with also like to make a charitable donation, usually of around £50.

 #2. When the recommendation converts, send a personalised gift

Personalisation is more important than the cost of the gift.

So, stop sending generic hampers, gift tokens, or bottles of champagne. Instead, take Know Your Client to a new level and dial up the personalisation.

If you don’t know your client well enough to select a gift, you have two options.

Firstly, if they have them, take a look at their social media accounts for inspiration. Secondly, speak to the person the existing client introduced you to and ask for their advice.

And for bonus points, consider sending a subscription-based gift so that when the coffee, wine, book, or whatever you choose lands on your client’s door mat for the next six months, they’ll remember you and why they’re receiving the gift.

#3. When the new client leaves a Google or VouchedFor review, share it with the person who made the original introduction

This third point leverages your hard-won Google and VouchedFor reviews.

All you need to do is take a screenshot of the review, then email it to the client who made the introduction with a quick thank-you note saying something such as:

“Dear <insert name>

Thank you again for introducing me to <insert name>.

I thought you’d like to know that they have been delighted with the work we’ve done together and have recently left this review on Google/VouchedFor.

<insert screenshot of review>

We value your introductions to us, which means that the people you care about will have a better financial future.

Thank you once again.

<insert usual sign off>”

A 136% increase in referral numbers

Doing these things as part of a broader strategy helped one firm we work with increase referral numbers by 136% over the last 12 months.

That means they:

• Took on more clients
• Spent less money on other marketing tactics
• Worked more efficiently, because referrals have a higher conversion rate.

However, you might have a nagging doubt…

Not as expensive as you might think

If you’re concerned about return on investment and worried I’m spending too much of your money, let me provide some reassurance.

If you follow our advice, for every 10 referrals you receive, our experience shows you should convert at least four new clients, so your costs will look something like this:

• £500 in charitable donations
• £50 for cards (think John Lewis, not Poundland!) and postage
• £400 for personalised gifts, assuming £100 per gift – some firms spend less.

That’s a total of £950 and an individual Client Acquisition Cost (CAC) of £237.50.

Given the average initial fee, plus ongoing fees and uplift in the value of your business, that’s a relatively tiny amount of money.

Part of a broader strategy

Client appreciation is only one part of a broader strategy for maximising the referral opportunity.

If you’d like our help to implement the education and communication elements, we’d be delighted to chat with you.

Email abi@theyardstickagency.co.uk or call 0115 8965 300 and let’s chat.