Referrals? Yes, no, sorta, eh?

Kristen Tepper
Hi all, a previous lurker here. I am really curious about how everyone goes about maximizing their referral business or if this is even a focal area at your average dealership? According to my research - on average a salesperson only asks 15% of people for a referral (seems high in my opinion but I digress). Yet about 83% of happy customers are willing to refer - majority saying they end up NOT referring due to not knowing how to submit their referrals information to the dealership or forgetting entirely. Still though - 59% of vehicle shoppers saying they received information from friends & family about a particular dealership leading up to their purchase and the internet/social media turning us into "shareaholics" it just seems sensible that referrals be a focus area for any dealership but the more I research the more I realize there is hardly ANY incentivizing for referrals or even an easy way to refer a friend at most dealerships... (landing page, referral form, share links, etc) So, my questions are pretty straight-forward... 1.) how do you capture and track referrals? 2.) Do you pay out your referrals/incentivize them in any way? 3.) Do you have a referral program in place currently that you truly market and optimize? 4.) Do you think your sales team understands the worth of a referral and understands how to approach a referred customer? 5.) And would a program that assists in making asking for a referral painless for yourself and your sales team - while also giving you tracking and optimizing capabilities even interest you?
Nick Sinko
As a sales person, I have been toying with the idea of having a referral draw. Contacting all my sold customers and asking them for a referral for an entry into the draw. Same goes for customers on delivery. Each name and number they give me of someone they know is in the market = 1 ballot in the draw. I would draw for things like a $100 restaurant gift card, or something of similar value. Enough that they would be motivated to think of a referral.
Lauren Moses
I can not speak from experience because we don't do referrals since they are against the law in Louisiana. But, I have seen guys/gals get a stamp made to put on the back of their business cards. Some have the business cards made up with their own referral program right on them already. Most do $100 for every SOLD customer. Just giving a name and number isn't enough. They have to truly be in the market and purchase. They usually keep a log of any that give referrals and any that are from referrals. Most usually just take the $100 our of their commission, but they are holding gross and can afford to do it straight from their personal commission. If it's a slow month I have seen them do a "Bonus Referral" of $200, but it's usually just a one time offer to the next person who sends a referral. As for their marketing, they have their business cards, promote on facebook, twitter, any social they are on, send emails, letters, thank you cards. They have pens and other promotional items made up like stickers, etc. They are not marketing their dealership but themselves and pushing to get their customer base up. Some go as far as to have a whole packet made up for each car they sell that contains stickers they do on various spots on the vehicle (non that can be seen unless you open a door, the hood, gas tank, etc.), pens in the cup holders, thank you card. etc. They can get a little crazy sometimes but it really works from what I could see.
Dave Leger
Nick... If your clients have a great experience with you, they will think of you for referrals naturally. I'm not saying a referral bonus program is a bad idea. I actually think they are a good thing if done properly... But again, it will come back to the experience. You can offer $500 referral bonus, but if they don't truly believe their friends or family are in good hands, they're not going to refer anyone. Are you thinking of a draw because this is coming straight out of your pocket? If so coughing up $100 a referral can be a costly venture for you, so I get it. Often times, a good GM or DP will cough up the money if you present a good plan to them. Staying in touch with your clients, and treating them well is the best source of referrals you will ever get. A birthday call, a walk to the waiting room to check in with a past client waiting for service to be done... Knowing when you clients are coming in for service and popping by... A quick hello phone call every 6 to 12 months with your past clients and they will remember you, and when someone brings up the topic of cars... You'll be their "Guy"... "You gotta call Nick. He takes such great care of us." The key is that it comes across as genuine, and you're not just fishing for more business. People will help those who help them. Now you can enhance that even more by surprising the referring person every now and again with a special thank-you. A git card, cash reward, covering their oil change when you see them next... But most of all, a quick call to say thanks on every referral they give you, from the heart, will be worth the effort.

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