Referrals are the most cost-effective and most valuable form of marketing. Why? Because referrals, coming from friends, family or colleagues, have a great deal of trust and credibility. They are a powerful tool because they come from a credible third-party that has experienced first-hand the benefits of your product or service and your company’s professionalism. A recent Dun and Bradstreet survey found referrals to be one of the two most popular small-business marketing methods.
“Up to 45% of most service businesses are chosen by customers based on the recommendations of others.”
Referrals also encourage brand loyalty as customers who make referrals about your business become more attached to you and your business. “Once someone stands up and makes a public statement about you, psychologically they will become more loyal to you and your business,” says David Frey, a marketing analyst.
“83% of satisfied customers are willing to refer products and services. But only 29% actually do.”
Tapping into this often underused and yet most compelling form of advertising takes some skill and planning, but will be well worth the effort. You won’t get what you don’t ask for … so let’s look at some easy-to-implement ways to encourage referrals within your customer base.
Referrals are Appreciated
Give them a Reason to Refer. Before you can encourage referrals, ask yourself … Are you confident in your brand identity and reputation? If you want your customers to spread the word, be referable. Live up to you promises, provide the product/service in a timely manner, offer quality and value – giving them more for their money, not less, and be friendly, accommodating and easy to work with.
Ask for Referrals. It sounds simple but are you making consistent efforts to make your customers aware that ‘referrals are appreciated’? Add that request to your cards, website, blog, newsletter, social media and email signature. Many small business owners assume that referrals will happen by themselves if you give good customer service. That is simply not true, so be proactive in requesting referrals from your network.
Offer a Reward. A small gift (gift card, discount, promotional item) can go a long way to encourage first-time and repeat referrals. For a more organized system to expand your network, develop an affiliate program.
“A University of Chicago study found that non-cash incentives are 24% more effective at boosting performance than cash incentives.”
Say ‘Thank You’. How many times would your mother remind you of this when you were a child, but have we forgotten this basic principle in the business world? Show appreciation for that customer or vendor that stuck their neck out for you by a simple phone call, email, or – even better – a handwritten note.
Use Social Media in your Referral Program. Use your network of friends, fans, tweeters and pinners to encourage referrals. Publicize your list of services, your satisfaction guarantee, refund policy and testimonials of past referrals to your social media audience, making it easier for them to share, repin and retweet. LinkedIn is a great destination for small business owners and business professionals, so update your profile and share the link with all your colleagues, vendors and clients.
“Consumers are 71% more likely to make a purchase based on social media referrals.” (Hubspot)
Create a referral program with other like-minded business owners. For businesses that offer services that compliment your product or service, offer to set up a referral exchange program. Example: A home builder develops a relationship with a Realtor, a Music Instructor partners with a musical instrument retailer, a nutritionist with a vitamin distributor, etc. Before you begin such a relationship, research the company and its product and service because you do not want the association to hamper your own reputation by referring them. Again, make sure they are referable.
Make it Easy to Refer you. Add a link to a form on your website for referral submissions. This will also make it easy for you to track and monitor the referrals and their sources. (If you need help adding a form or a database to your website to create a referral submission, call Startup Production today.)
a Friend Referred, you must be a Friend Referrer. This is the easiest and most effective way to encourage referrers from other businesses, vendors and professionals. Refer them … and they will refer you in return!
Startup Production would like to take the time to thank all its clients, subcontractors and vendors who have been referring our services for the past fifteen years:
“I highly recommend her for your web development needs.” – Todd Renner, CFO of CTI Science at www.ctiscience.com
“I highly recommend this company. Nicole is professional easy to work with.” – Ashley Renton, owner of For Paws Unleashed at www.forpawsunleashed.com
“Will highly recommend Startup Production to others seeking professional Web design and/or graphic services.” – Deborah Hamilton, President of Armeda Foundation at www.armedafoundation.org
“I would highly recommend and endorse Startup Productions for any future work.” – Jason Rowlett, Executive Producer at Monstrosity.tv
“We are very pleased with the finished product, and would recommend Startup Production to anyone wanting a web site.” – Paul Jenkins of www.topservicelex.com