Customer referrals are good for business. Why not put a system in place to get more out of them?
Customer referrals are an effective, often overlooked way to obtain new business and grow your company. Many businesses, including contractors and consulting firms, rely heavily on word of mouth.
According to an online survey by Business Networking International, more than 70% of new business comes from networking and referrals. However, referrals are often random and unpredictable. One way to boost the potential of your word-of-mouth business is to adopt an innovative business strategy known as referral marketing.
Referral marketing takes proven, successful marketing strategies and uses them in a new way. It's a structured program of proactive communications, incentives and rewards; all designed to optimize your word-of-mouth business.
Your first step is to provide great customer service every time. Satisfied customers are more likely to recommend your company to others. A comprehensive referral marketing strategy involves more than that, however. Here are the key elements of a successful program.
Another option is to create a cross-promotional program with other companies. Under these agreements, businesses refer customers to one another if they can't provide the services needed. It's an effective way to gain new business and establish your credibility in the community. Ask non-competitors serving your target market to recommend your company in exchange for a percentage of the sales.
A successful referral-marketing program will benefit your organization in a number of ways, including:
Overall, referral marketing is a great way to take advantage of what's already a valuable part of your business — satisfied customers.