Referrals are an awesome way to help squeeze more value out of each of your existing customers, while building loyalty at the same time. Customer referrals are one of the most powerful selling and marketing tools available.
There are typically two ways potential customers will hear about your business: through advertising and marketing, or customers acting on your behalf to tell people about your business and services. Below, we will explore the power of referrals and different ways you can generate value from them. These tips are not only for mid-size businesses though. The average small business gets 60% of its business from referral campaigns.
Having a satisfied customer
Referrals can be a great tool to grow your business and increase your reach. The first step to have customers refer your product or service is making sure that all of your customers are happy and satisfied. You can not ask customers who aren’t happy with you to give you referrals. First give them something they love. If the customer is pleased with how they have been treated and served, and with the value they’ve received, they will be more willing to attach their name to you and your products.
Offering an incentive can prove very effective. People are four times more likely to use a service or buy a product when referred by a friend, and offering a reward increases referral likelihood. Incentives are one of the most important methods of generating referrals for successful business. Remember, finding the right incentive is a big challenge, especially if you want to score big by building word-of-mouth business. Don’t underestimate the value of recognizing and rewarding the people who send you business. A well thought out incentive program has the potential to add much more business.
How to reach your customers: How do I get more referrals?
With a well incentivized customer referral program each customer becomes more valuable to your business, because they now will also help you find new customers. However, to activate a happy customer base to turn it into such a valuable business development tool, promotion of the program is something you need to do.
One way can be to harness the power of social media. Facebook and Twitter can do wonders if used right. Advertising that you are giving incentives for referrals using social media can help you reach your customers efficiently. Sending dedicated email, Tweets and Facebook posts has proven to be extremely effective. These messages should have a single call to action, with an incentive for that action and no extra information.
Using your website can be another method to advertise your referral program. The upper left portion of your page is the most valuable real estate because we read from left to right and top to bottom, so having a web badge or a referral button on the top left could also drive referral traffic through your website, to your business and bottom line.
There are many ways you can improve the amount of customer referrals your company earns. Whether it’s through targeting the right user, choosing the right reward or promoting the program consistently, the key to a successful referral program is a dedicated effort. While the above is a great start to getting your head wrapped around referrals and how they can benefit your business, we encourage business owners that we work with to scour the internet to learn more about referrals, or ask our team about how they’ve structured referral programs to work successfully in the past.