Earning the trust of customers and prospects is no easy task, but it is necessary if you want your business to be successful. One way of accomplishing this is through referral marketing, which entails strategically creating a plan for how to get members of your network to recommend your business to new prospects. Since those being referred to you are hearing good things about your company from someone they already trust, they are likely to also trust you much more quickly than prospects coming in from other sources.
You do not have to take our word for it…
- 92% of consumers trust referrals from people they know. - Nielsen
- 83% of people rely on the opinions of family and friends to make their purchasing decisions. - HubSpot
- Word-of-mouth can improve marketing effectiveness by as much as 54%. Businesses using referrals as part of their regular marketing see conversion rates up to 70% higher, and they also report a 69% faster close time. - Marketshare
Taking all these facts into account, every company’s regular marketing efforts could benefit from the addition of referrals. Of course, if you provide a great customer experience, a fair amount of this will happen organically. In fact, more than 2.4 million brand-related conversations take place in the United States every day according to HubSpot. However, it is also important to make conscious moves to collect as many referrals as you can.
So, how do you start implementing referral marketing?
- First, identify existing customers that could give worthwhile referrals.
- Next, focus on building these relationships. You should be delighting these key individuals during every interaction with them, be it a one-on-one conversation or a piece of content you send them. In your communications with them, show that you understand their pain points and let them know how your services can solve their problems. It is not enough to just do your job well once and move on, you should be constantly engaging your customers in order for your business to remain top of mind. Really, you should be doing all of this anyway, even when you are not looking for a referral.
- Finally, once you feel like a relationship is solid and the customer is happy with you, ask them if they would be willing to give you a referral.
Be strategic when it comes to timing and making the ask of your customer. They should have recently had a positive and valuable experience while working with you. Surprisingly, the right time is not always at the end of a project. The customer is probably thinking about their invoice still and might be excited to move on to the next thing. Instead, look for opportunities to ask for referrals throughout the course of working with someone. Repeat customers are ripe for the picking, especially immediately before they begin working with you for the second time. Ask them if they would not mind sharing the reasons why they came back to you.
Bear in mind that people can say no to referral requests. If they do, the best policy is to give them space and not pry about their reasoning. After some time has passed, you can consider revisiting the conversation, if they seem receptive to it. The best way to do this is to suggest other ways they can share their experience with your business besides referrals, such as…
- Reviewing your services online
- Serving as a case study
- Submitting a testimonial
- Taking a survey
It is surprising how often people forget to follow up after a referral is made. Of course, getting in contact with your new prospect right away is crucial a crucial step in the process of turning them into a customer, but thanking the person who referred you is also vitally important. When sending a thank you, be specific about your gratitude. Let them know if their referral worked and why you think it was or was not successful. Explain to them how their small act positively impacted your business.
Be sure to remember that everyone’s time is valuable. Your customers may wonder what they get out of taking the time to refer you. That is a fair point, especially if they helped you close a sale, so consider how you would like to reward them in return. Putting in extra effort to show customers how grateful you are that they were willing to advocate on your business' behalf is well worth it. You may have to use some resources to do so but taking care of these customers makes them more likely to continue referring you. Here are a few suggestions for how to show your appreciation…
- Create a customer loyalty program or tie an existing one into your referral request and fulfillment process.
- Send a gift for each successful referral; that is a classic choice.
- Reward customers who refer you with discounts on your own services.
Sending a thank you, and perhaps a gift, is a great way to continue building relationships. Again, a lot of these practices are just good business. However, these customers have proven themselves to be particularly valuable so do not slack when it comes to maintaining partnerships that are likely to benefit you again in the future.