Referrals are a great way of generating new business. Word of mouth and third party recommendations are powerful means of attracting customers, but you shouldn’t simply be relying on them to happen, even if the quality of what you can offer is undeniable.
Referrals should be treated strategically, like other crucial marketing activity. To maximise their effectiveness and to increase the number you receive, you have to devise and follow a referral marketing plan.
Who Holds the Power?
Who is doing the best job of selling what you do to others? Certain trades such as builders and plumbers rely heavily on word of mouth recommendations, but the positive effects of advocacy can apply across a whole range of business sectors.
Research reinforces the increasing impact of word of mouth over traditional forms of marketing, and the prevalence of social media channels enhances the opportunities for word of mouth to spread.
Understanding this is one thing, harnessing it to make the most of it in marketing terms is another.
Get With the Programme
This is where you get organised, and where you shift the emphasis on referrals from being a pleasant surprise to a tangible marketing programme.
Firstly, you have to let your customers know that you have a referral system, where you can officially ask them to make a recommendation on your behalf. This means that maintaining customer satisfaction is critical. Your customers have to have a reason to want to recommend your services to others.
To support this, you need to set up and maintain a proper customer relations management (CRM) system. In essence, you need to keep the communication channels active and engage with your customers.
If your customers have issues, resolve them quickly and efficiently – the idea is to turn any negative into a positive by emphasising your level of customer care and engagement.
Now you have to ask them for referrals. This might not seem easy, but it’s essential you frame the question in the right way, and present it as a logical extension to how you communicate with them systematically.
Offer Rewards to Encourage Referrals
You may wish to offer a further incentive to your customers in order to help secure referrals.
You can either just reward the sender of the referral, or, in addition, offer some sort of discount to new business customers who have taken up a referral. This is known as a single or double-sided rewards system. The double-sided reward is more likely to shore-up your future referrals and motivate customers to carry on recommending you.
In terms of what kind of reward, this will depend on your type of business. But it might be a voucher scheme, or a discount on a particular service or product.
Explore Social Media to Expand Your Programme
Using your voice to promote your expertise is no longer enough. The power of referrals comes from trust – people trust their family and friends pretty much more than any other source.
Social media links these networks of people, so it’s vital that you have an active, engaging presence on the appropriate channels.
Ensure you have a testimonials page and get your recommendations shared as much as possible.
It’s nice to be talked about, but the real benefits of referrals come from being able to use them to acquire new customers and grow your business on the back of them.
Reform Creative is a Manchester-based creative design agency. We specialise in helping businesses communicate with their customers and we understand the power of referrals and their importance in generating new business.