by Caroline Cooper
April 2011

There’s nothing like a testimonial or referral to endorse your hotel or restaurant. Pick up any research on advertising effectiveness and you’ll see word-of-mouth at the top of the list.  But they won’t say good things about you unless you meet and exceed their expectations.
 
Give people a reason to talk about you

So, do something exceptional. Think of the things that are of high value to your guests but low cost to you so you can give great added value. Give people a reason to talk about you.  Then ask for the testimonial. Ask for a comment in the guest book, on email, or on a review site. People need to be prompted to do this.
 
Get referrals

Referrals go one step further and are a great way to build your customer base – if a person comes to you as a result of a referral, you don’t need to go out and find them. The person who made the referral has already experienced what you offer and will do the selling for you. And referrals build loyalty with the people who recommend you – they will want to be seen to stand by their referral by continuing to come to you themselves.

But referrals, just like testimonials, won’t always happen unless you ask for them.
 
The obvious people to ask for referrals are your existing guests. Focus on those guests or customers who are your ‘perfect guests’ as the people they refer will be a better match to your preferred type of guest.

Think about other people who know you well enough to recommend you. This might include colleagues, suppliers, your own team and others in your network. This will be easier the better they know you and when they fully understand the extent of everything you offer.
 
Make the referral process easy

If you don’t ask you don’t get.  So ask guests directly who else they know who may be interested in your promotions or forthcoming events.  The sooner you do this after they have stayed or visited, the better. This is the time they are likely to be most positive about what you delivered.

The way you ask for referrals is key. If you ask:
 
But if you ask a specific question, for example:

Creating a simple referral form that you include with the bill can encourage existing guests to make referrals. Make this prominent, and offer incentives for them to give you names.

Maintain relationships with your guests, even if the likelihood of more business with them is limited. They are more likely to refer you to friends, colleagues or others if they have had recent communication from you.

Even if a guest only stays with you once they have a network of friends and colleagues who may also be your ideal guests. The lifetime value of one guest can be their connections to other guests, too.
 
Reward referrals

Encourage guests to give you contact details of others and referrals by rewarding them in some way.

As an absolute minimum, ensure that you thank anyone who makes referrals to encourage them to continue to do so in future. Don’t wait to see if this actually leads to business, as what you are looking to reward is the referral process. The more referrals you have the greater the likelihood of gaining new guests.

Consider what other tangible incentives you might give that are of high value to the person making the referral, but at a low cost to you. Just ensure that the cost of the incentive does not outweigh the value of the referral. The nature of this incentive will obviously depend on where the referral came from, but they might include such things as a gift, cash bonus (to staff making referrals), discount off their next meal, an invitation to an event, offer unique to your hotel or restaurant.

Once you have a referral system in place, keep track of where and how you’re getting successful referrals. This will enable you to find out what works and what doesn’t, so you can refine the process.
 
Summary

So remember:

• What are you doing to deliver exceptional customer service to encourage referrals?

• What systems do you have in place or need to set up to generate referrals?

• How will you reward those who give you referrals?

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Caroline Cooper is a business coach with over 25 years experience in business and management development, and founder of Zeal Coaching, specializing in working with hospitality businesses, and is author of the 'Hotel Success Handbook'

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