Referral marketing is a structured, systematic process to maximize word-of-mouth potential. It is a unique marketing tactic that, if done correctly, allows the business and the client to collaborate for mutual benefit. The client is rewarded for referring a qualified lead, and the company receives those qualified leads.
If you work within the professional services industry, you already know referrals can make or break a business. In fact, according to Ken Krogue, co-founder and president of InsideSales.com, “A direct referral lead is over 36x more valuable than a lead generated by a cold call, 10x more valuable than a trade show lead, and 4x more valuable than a web lead.”
So, what referral tactics work best?
- Create a “share-worthy” customer experience: Jet is an e-commerce site that sells a wide assortment of goods, from electronics to toys to home goods to groceries. They offer many of the same products as Amazon, but on a smaller scale. The company is successful, in part, because they offer two-day shipping on orders over $35 (with no membership needed) as well as 24/7 US-based customer service. If you offer customers a positive and unique buying experience, they are more apt to share that experience with family and friends.
- Remind customers: According to a study conducted by Texas Tech University, “83% of consumers are willing to refer after a positive experience—yet only 29% actually do.” Be sure to follow up with customers after a service is completed or a purchase is made, and ask them to refer your business if they were pleased with the product or service. Also, add forms and reminders to your website, social media posts, and email marketing. When you want something, you have to ask for it, plain and simple.
- Offer rewards: It’s oftentimes easier to get customers to refer your business if they feel like they’re providing significant value to the prospect they’re sending your way. Consider offering a discount or free consultation to anyone who approaches you via a referral. Also, be sure to deliver value to your customer providing the referral (e.g., a discount or comped product/service). The “thank you” gift communicates appreciation and encourages them to send more leads your way.
- Develop valuable content: How do you get customers to share your company with their networks more often? Provide them with plenty of shareable content! A mix of blogs, eblasts, and video will make it easy for them to tout you as the industry expert.
- Promote a referral program through a chatbot: Chatbots, on Facebook and elsewhere, are powered by artificial intelligence. Businesses use the technology to deliver 24/7 support, reduce staffing costs, and generate more leads. They also provide ample opportunity for promoting a company’s referral incentives. Uber, for example, promotes their referral program through the chatbot they implemented into Facebook Messenger. The company makes the referral process easy by allowing users to select and refer friends directly from Facebook or their mobile contacts.
- Give a referral: It’s one of the easiest ways to get one in return!
- Establish a tracking system: To determine whether your referral marketing tactics are effective, define specific objectives. Your goals should be quantifiable, such as “an increase in referrals by X amount in X period of time.” Tracking these numbers will reveal what works and what doesn’t and will help guide changes to your strategy.
- Bolster current marketing goals: What are your current marketing priorities? In which service areas would you like to see an increase in revenue? If you’re a restoration company looking to promote more of the flood damage part of your business, your referral program should target customers who’ve recently utilized those services. The more your referral program focuses on the demographics targeted in your marketing objectives, the easier it will be for you to achieve those goals.
Referrals are an extremely powerful conversion tactic, as people are more apt to invest in a product or service that’s recommended by a friend, family member or associate than something they learn about through a traditional marketing campaign. To ensure your referral program is successful, offer a compelling incentive, make the referring process easy and take the time to educate customers, business partners and employees about how the program works.
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