Why Customer Referral Programs Are King
As with the majority of decisions facing businesses today, it is necessary to weigh the costs of implementation before taking the plunge into something new. But there are some areas that are obviously worth their cost, and one definite program to always have is a referral program.
It is a known fact that if one person recommends you to another through word of mouth then the person referred is more likely to buy. A referral program is exactly like this, except more organized. Basically, it’s a method that allows your clients to recommend numerous people to your services. Keep in mind the Pareto Principal – you’ll get 80% of your business from 20% of your customers. It does not tell us which ones will specifically refer the most business, so knowing who is the best ahead of time is impossible.
If this is new to you, it’s worth running over the basics of a referral program. You must always make sure that your customers are happy – an unhappy client is not going to ever recommend you. When someone sends you business, always be sure to say thank you. That little bit of recognition will have great meaning to a person. Always reward your clients for these, even just a simple ‘Thank You” will always be appreciated by your customers.
Be sincere when you ask for referrals. It is part of people’s nature to not want to spend time on something other than their own immediate needs, so making it as simple as you can is a great idea. Taking an idea as simple as this and using it properly can have a tremendous effect on a business’s life and growth.
A referral program should ensure that you get quality, actionable contacts to follow up on. This doesn’t mean that they will “buy now”, but that at some future time they might change to active customers, if followed up on consistently. With any program, it is best for you to ensure that it’s implemented properly. Referral programs offering whatever will work as well if most of your sales get done in person by your sales force, or in a retail store.
As always, looking at the simplest forms of what you want to do will usually give you the best idea on how to have them work best for your business, which may not always be the format that works best for others. Run the program, if it works, great – if not, change what needs to be changed until you reach a formula that suits you and your company best.
Tags: Internet Marketing, referral marketing, referral program, viral marketing, word of mouth marketing