If you ask any other managed services provider about the most effective way of earning clients, you will most probably hear about referrals. However, even the happiest of your customers won't always refer your exceptional services to their business connections. But why?
Sometimes they need an incentive and sometimes a kind reminder is more than enough. You don’t necessarily have to create a planned and scheduled step-by-step procedure; however, there are helpful tips and tricks that will allow you to gather more clients, thanks to your existing ones.
In this article, we will provide a guide to earning more referral leads. We will also define a basis for the creation of a powerful MSP referral program. (You might also want to check out MSP's best practices in client onboarding: )
Before You Start
Before you start reaching out to your clients, ask yourself why exactly they should connect anyone to you. No incentive will be big enough if your clients do not value your services or are not satisfied. The incentive program is a mere reminder, coupled with a gift for your clients, that they can help your managed IT provider grow. A reminder is needed, because most of your clients think about the growth of their businesses, rather than yours.
If you have been running an MSP for at least some time and already have some clients, you should have landed a couple of referrals. If you haven’t, then it’s a clear sign that your services are not as stellar as you believe. So, it is advisable to perform a customer satisfaction survey before you start asking your clients about referrals. You can use a net promoter score (NPS) as your clients’ satisfaction metrics.
Further reading 10 Tips to Improve Customer Service
Building an MSP Referral Program
An MSP referral program is typically an incentive and a number of steps to promote this incentive to a customer for the referral action. Depending on the size of the incentive, the action could be giving you a contact, or a signed referral contract. Your referral program should be planned at all stages, from defining and announcing the incentive up to the moment when you close the deal.
Create a Captivating Offer
First of all, your clientele should know about your referral program. You should create a notification system that will cover the offer in detail—not too flashy or aggressive though. The idea of such a system is to introduce all your customers to the program and the incentive and remind them about its existence from time to time.
There are different techniques to drive your clients’ attention to your offer, including adding an urgency factor by making the offer time-limited, or exclusivity by making the clients who participate members of a club (by adding custom, exclusive “swag”). These techniques should be used with extreme care, as they typically belong to business-to-consumer markets.
Depending on the situation, the incentives can vary from branded swag to discounts for your services. Here are some typical incentive types in the MSP space:
- Non-monetary rewards. Researchers say that non-monetary rewards are more effective than monetary. However, bear in mind that these studies have mostly covered business-to-consumer types of incentive programs. Nevertheless, they still have a point. Typically, an incentive is simply not big enough in terms of money to persuade your client. For some customers, it might also sound as if you are trying to bribe them into sharing their business contacts. There are all sorts of non-monetary rewards, including ones that you grant just for sharing contacts—gift cards, books, or fancy swag, for example—and ones that you grant only if the contact turns into a contract, such as additional free services for a limited time and discounts.
- Monetary rewards. Rewards based on money are not the best idea when you think about your customers. That might look as if you are both trying to bribe them and throwing your money away. However, it might be considered if you have channel partners, or other MSPs or vendors.
Also, if you have a highly loyal customer base or don't have time and money to spend on swag and discounts, you can try a referral program without any incentives at all. Remember, if your clientele are happy with your services, there are good chances that they will provide you with valuable contacts for nothing. You should only remind them about such a possibility from time to time. (Learn more about customer retention in our article: MSP Customer Retention: 5 Best Practices to Reduce the Churn)
Further reading How to Get Managed Services Client Referrals
MSP Referral Program Promotion
So, how do you actually make sure that your clients and partners know about your carefully thought-through referral program? Here are the steps to consider:
1. Create a dedicated page on your website.
2. Add a postscript to your emails to your customers, overviewing the incentive program or simply pointing to the dedicated page you've already created.
3. Talk to your customers during quarterly business reviews and other in-person meetings.
Share the referral program details through your social media. It is also a good idea to ask your staffers to do the same.
Tracking an MSP Referral Program
Tracking your referral program is necessary for two reasons: you don't annoy customers who already have shared their contacts, and you analyze the lifecycle stage of your referrals and the overall efficiency of your referral program. There are a number of services and solutions that are aimed towards tracking referrals in the B2C space. However, the typical MSP does not have to deal with thousands or even hundreds of customers, and an easy-to-manage and simple spreadsheet will be a much better alternative.
To create a basic template for such a spreadsheet, include date, referral's name and email, and lead status.
In a way, earning a referral is the cheapest way to generate new leads and land new clients, as you don't have to invest in marketing or employ a salesperson. All the same, you must be sure that you provide excellent services. Also, don't forget to kindly remind your happy customers about their ability to help you thrive. In the end, the goal of each business is to grow. And your customers, being business people, should understand that and, with the right incentives and the right timing, will gladly bring you more clients.