2 min read
Gain New Business with a Referral Program
There was a time when word-of-mouth was the driving force behind all business. Since then, there have been marketing and business developments that allow organizations to generate new business and revenue through advertising and marketing.
However, in an age where every business is marketing themselves as the best choice or product, it's hard for consumers to sift through all the marketing and decide for themselves which option is best for them. Both online and offline, consumers are bombarded with marketing messages that all seem to be the same mass-produced message: "We're the best."
But, why should consumers trust your advertising? From a young age, people are taught to be critical and untrusting of advertising and marketing, thus taking all messages they receive with a grain of salt. This is why word-of-mouth marketing has once again re-emerged as an important marketing component: people trust people they know.
The re-discovered prominence of word-of-mouth (or referral) marketing is not just anecdotal. In fact, a recent study showed that a referred customer is 25% more valuable than a non-referred customer, and referred customers are 13% less likely to defect than those customers who were not referred by someone else.
Gaining referral customers depends on the strength of the referral program. Do you have a program in place that allows your current customers to refer a friend or share a discount? Can customers collect points for bringing on new customers? These actions are trademarks of a successful referral program that thrives on word-of mouth. Here's how you can start a referral program that is sure to generate those valuable referral customers you crave.
Make sure your current customer base is happy
There's no point in asking customers to refer their friends to your business if they're not happy. Unhappy customers don't make for the referring type. First, you want to make your existing customers happy so that they are more likely to share your products and services with others.
Tell your customers about referrals
Even the happiest of customers may not think to tell friends about your products or services. It's up to you to remind them that their friends may also like your services. You can do this simply by just inserting a section into your newsletter or sending an SMS blast to your existing audience.
Incentivize customers to refer
But, what's in it for the existing customer? Why should they refer their friend to you? Your referral program should reward the referrer for their time and effort. For example, if someone refers a friend and the friend makes a purchase, send the referrer a 10% discount or a buy-one-get-one-free offer. It's important that you tell the referrer about the special offer before they refer someone. So, using the SMS example above, you could send your customers a text like: "Hi! Refer a friend and get a 20% coupon when they make a purchase."
Let automation do the work for you
On top of all the other marketing emails, SMSs, and messages you're already sending, adding a referral program could be a lot of additional work. Luckily, there are automation platforms that will do a lot of the heavy lifting for you. Let automation send your referral program offers to your contacts, track which ones send referrals your way, and send rewards automatically.
If you'd like to try automation for your referral program, sign up for a 14-day free trial of SimplyCast 360.