Growing your business with referrals
Did you know that peer recommendations are about 2.5 times more effective than other marketing efforts? Referred business is generally more valuable in the long run too, as it generates better margins combined with higher retention.
Instead of focusing your efforts tirelessly investing in advertising, direct mail, email marketing, and cold calling to generate new business, look at the opportunity that lies within your existing business.
Developing your unique referral programme is critical to ensuring a steady stream of referrals and should be part of your marketing strategy.
Important considerations when developing your referral programme:
1. Be referable.
Give your customers something to talk about. Deliver a great customer experience and live up to product expectations. This is the foundation.
2. Define and discuss your target customer.
If your networks and most satisfied customers don’t know who will benefit most from engaging you, they’re less likely to refer business.
3. Serve your target customers best.
Don’t be everything to everyone. 80% of your business will come from 20% of your customers, so focus your efforts on wowing the right ones. This will also increase your referral rate.
4. Ask for referrals.
This doesn’t often come naturally, so build it into your sales and retention process. In the least, asking the question will provide invaluable feedback, ideas for innovation, a Google review, or a glowing testimonial.
5. Timing matters.
Remember to strike when the customer’s perception of value is at its highest. Don’t leave it too long, especially if a customer sings your praises. Never ask for a referral when providing the invoice.
6. Offer referrer and referee rewards.
Sharing is caring. Make sure you promote your generosity across your digital channels.
7. Measure the success of your referrals.
You can’t maximise what you don’t measure. Track the referrals you receive and calculate the return on investment by dividing the benefit by the cost. Then you can compare to the effectiveness of your other marketing channels.
8. Give thanks!
Be it an email, a thank you card, free product, a reward (see point 6), or something grander. Do it not only to show your gratitude, but to encourage more referrals.
Developing and implementing a referral system, with elegantly positioned questions and a process for acknowledging and rewarding referrers will help your team actively seek referrals.
Get in touch so we can identify ways you can grow your business with referrals.
“The purpose of a business is to create a customer who creates customers.” – Shiv Singh