Word-of-mouth or referral marketing counts among the most effective marketing strategies a business can use. It also accounts for a majority of the new clients that come into a business, a full 65% of them. Aside from this, studies also show that a customer that’s referred to a business will spend more money with a vendor than one who isn’t referred. That being the case, it is worth it to today’s marketers to launch referral marketing campaigns. If you’re planning such a campaign for your business market, pay attention to these six strategies and examples.
Best Referral Marketing Strategies
1. Start a VIP program
People like to belong to the inner circle. A VIP club or program is one of the ways you can bring them into your inner circle. Often a rewards program includes products or services at a special price, giveaways, and other goodies. That being the case, why not dovetail some of your rewards toward your referral programs?
For example, say that you’re a physician– Specifically a chiropractor. You could start a VIP program for some of your top clients. Each client who refers a new client to you could get a free treatment or a package of treatments as a reward. This could even be a graduated rewards program like a punchcard system: A single referral gets the customer in question a free treatment. Ten treatments earns the referring customer three chiropractic treatments plus an appointment with the on-staff massage therapist.
One thing to keep in mind, however, is that your business must have enough regular customers to make a VIP program worth it for you. Inc.com cautions business owners to consider this as they put together a rewards program. Doctors or Physicians have to build up their clientele, just like any other business. Be sure that you've go a decent clientele built up.
Additionally, a study from the AMA (American marketing Association) suggests that it’s not the size of the rewards program that matters, just that a company has one. In light of this, make sure your rewards program fits your business and your clientele.
2. Reciprocal Marketing
Do you own a business that offers a single set of services within a broad spectrum of possible services? For example, do you own a car body shop and work as a collision repair guru? If so, why not offer a referral trade with a local mechanic’s shop? You could refer customers to each other without damaging either business. These practices can can create a great social network strategy for companies with similar trade or ideas.
Not sure how to apply this to your business? Think about the things you do versus the things you can’t or don’t do. The services you can’t provide would be services you could trade with someone else for referrals. Some possible businesses that would benefit from this arrangement are:
- A fitness coach and a nutritionist.
- A copywriter and an editor.
- A coffee shop and a nearby hotel.
If you do participate in this type of referral marketing be sure to meet with the other business in question so that you can develop materials and the parameters for the program.
3. Always Give Them Good Service Above All Else
Customers want to have a good experience. They also don’t want to feel like the only reason you talk to them is to get something out of them. It’s a tricky balance. Yes, you do provide services for them for which you earn money. But no, it shouldn’t be all that you talk about with them. Instead, think about the 80/20 rule. Eighty percent of the time, you should chat with your customers about other topics besides the referral program.
In other words, concentrate on giving them good service based on the 80/20 rule. The Plan Plus Online website suggests that the way to do this is to pay attention to the small things, statistics show that paying attention to small details really matter. Make sure that you get back to people within a timely fashion. Be the easiest vendor for them to work with if it’s a business-to-business situation. Then, when the time arises, it’ll be easier to for you to ask for and for them to refer someone to you.
4. Know When to Ask
A Forbes article suggests that businesspeople ask for referrals while the customer is still in front of them, but after the transaction is completed. If the customer in question hasn’t finished the transaction or is still just a lead and not a regular client, then hold off.
However, assuming that everything feels okay between you and that client, then do be sure to ask for that referral. The Forbes article says that too many people don’t ask often enough for referrals.
Additionally, if you have a mailing list, take advantage of this from time to time. Just as you might offer regular sales to your customers, offer up some limited-time-offer rewards for referrals. Again, there is a caveat to this, however. Make sure that your customers hear from you on a regular basis. Otherwise, it’ll seem that you are only offering because you want something. Successful referral marketing is customer-centric. If you know what your customers need and when they need it, you’ll get better at asking at the right time.
5. Help Them To Help You
Let’s face it. This business belongs to you, not to your customers. Therefore, they may not know the best way to refer other people to you. If this is the case, then let them know. If you have a rewards program, create a brochure and a place on your website to teach them how to help you. Maybe you need a few reviews on Yelp. Let them know if that’s the case. Perhaps, it would be good to get them to join you on a Twitter chat. Once they agree to it, ask them to “bring along” a friend. Send them information in your email newsletter.
It’s really up to you to make your referral marketing program work and then to teach them how to do it. Letting them know that you appreciate referrals and good reviews helps them focus a bit on how to help you without causing them unnecessary challenges.
6. Ask Before You Need To
It’s easy enough to become blinded by the day-to-day responsibilities of your business. However, to keep a solid referral marketing program going, you need to think about it regularly. Not only that, you need to be feeding into the pipeline regularly. You don’t want to wait until you’re nearly out of new leads to be looking for more. Your referral marketing program works best if it’s always going. Remember that while social media and the internet are great, they can also hurt you.
When you first start your business, you may have to spend more time marketing. Maybe 40% of your time should be spent marketing in this case. Later on, as your business gets going, you can cut down on the amount of time you spend gathering leads. Twenty to thirty percent of the time is a good rule of thumb here. However, you still should be always trying to get leads.
Final Thoughts on Referral Marketing
Referral marketing is a way that you can take advantage of the word-of-mouth referrals your customers will give you. A number of ways exist to do this, from offering a VIP program to asking your customers to do a Twitter chat. That said, it’s helpful to remember that the most important elements of any good referral program is to always keep it going and to be brave enough to ask. The definition of marketing isn't defined by a software that you use to get your name out, it's defined by you, the face of the company.
No doubt you’ve had some success with referral marketing. What are some of the ways you’ve encouraged your customers to send you referrals? Leave your comments below.