Referral marketing. Has your company been tapping into this powerful lead generation source? If not, now is a great time to get started. When you solely focus your efforts on obtaining new customers, it’s easy to forget that your existing customers (and other individuals which we will cover shortly) can provide you with a sustainable treasure trove of new leads that have a higher chance of becoming loyal, recurrent clients.
A study by Nielsen found that 92% of consumers trust recommendations from friends more than all other forms of marketing. Furthermore, 77% of consumers were more likely to buy a product if they learned about it from friends and family (Source: Nielson).
So, if you’re ready to grow your referral business, let’s dive in and talk about some of the best ways to implement referral programs that tap into your existing customer base.
Before starting any kind of referral program, you have to first know who can refer business to your company. Below, we’ve outlined the most common and popular referral sources that you should consider targeting.
By far the most popular, existing customers are one of your greatest sources of new business. If they absolutely loved your product or service, there’s a good chance that they will share their experience with friends and family that happen to have the same problem.
You’re not just selling customers on the fact that your product or service is great, but your employees too. When you have employees that genuinely believe your product is helpful, or you have a rewarding referral program in place, they’re much more likely to spread the word.
Rather than keeping your sphere of influencers narrow, cast a wider net by tapping into referral partners. These are individuals that can send valuable traffic to your company through review articles or feedback that they share with their following via social media or their website.
Lastly, don’t forget about the vendors that you’ve formed a symbiotic relationship with. This is a crucial part of networking and relationship building. Once you have loyal vendors that you also send business to, they’re more likely to send their customers your way.
One of the easiest ways to begin collecting referral information is by implementing a submission form on your website. Capture the attention of your existing customers by telling them about rewards or special discount codes for new business they refer. This can be a form on an existing page or even a landing page where they input their and the referrers information. To make the process simple and enticing, provide them with a clear outline that states their reward and how they can redeem it.
Another strategy that can work wonders for your business if done right is referral cards. These simple cards are perfect for handing out to customers so they can then share them with friends and family. You can decide on the special offer or discount which is redeemable to anyone who has the card and makes a purchase. If you want to incentivize your current customers for handing out cards, consider adding a reward aspect that’s based on the number of customers they successfully refer. Lastly, you can also use them as simple “thank you” cards for anyone that becomes a customer of yours.
Rather than simply getting your name passed on to potential customers, share something that they can read or learn from. When you create easily shareable content such as success stories, testimonials, or case studies that highlight the benefits and outcomes of your product or service, you’re creating brand awareness while also building credibility. Some of the most popular forms of referral-friendly content include guide posts, blog articles, eBooks, and white papers. Whether digital or physical, these content pieces are designed to provide an abundance of value to readers that inspire sharing.
At the end of the day, every business wants to make money. Whether you want to network through LinkedIn or attend local functions, building relationships with businesses that have the same target audience as you (though not competing with your product or service) is a great way to create a steady stream of new customer referrals.
As obvious as this may sound, it cannot be stressed enough. While giving the referrer a discount or some kind of gift will surely incentivize them, it’s not always a requirement. What’s important is that you acknowledge their efforts and thank them for the business. It’s a simple way to convey to your referrers that you appreciate the value they add, ultimately making them more likely to continue referring new potential customers.
The day that every happy customer refers three new customers to your business is never going to happen. A study by Texas Tech University found that 83% of consumers are willing to refer after a positive experience, yet only 29% actually do! Follow up with customers after they make a purchase and ask them to refer you if they were completely satisfied with the product or service. Place forms and reminders on your website and in email campaigns. When you want something, asking is sometimes the best way to get it.
The last and possibly most important piece to the puzzle is knowing who’s most likely to refer new business. By tracking referral data, you’ll be able to easily pinpoint who’s actually sending over interested customers and who’s coming up empty-handed. Afterall, you don’t want to be wasting your budget and efforts on something that’s never going to pay off. You may be surprised to find that your best referrals are coming from customers that purchased a particular product, or from a referral partner with a highly targeted audience. Once you gain these invaluable insights, you’ll be able to harness its power and tweak your referral strategies to yield the best results.