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Why Customer Referral Programs Are King
In today’s business world, it is necessary to weigh the costs of implementation to avoid overspending. But there are some areas that are obviously worth their cost, and one definite program to always have is a referral program.
Everyone knows 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. It is a method that encourages your clients to recommend numerous people to your company. This sort of marketing does bring to mind the Pareto Principal – you’ll get 80% of your business from 20% of your clients. Having said that, it doesn’t tell us which ones, specifically, will be those that give the most business, so cherry picking is impossible to begin with.
If this is new to you, it’s worth running over the basics of a referral program. It’s important to ensure that your customers are happy – an unhappy client is not going to recommend you to anyone. When someone does recommend you, be sure to thank them. That will mean everything to someone, that little bit of recognition will go a long way. 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.
Keep things straightforward and simple until you have a great system, remember that what you do well may be specific to your company only. You should test several versions of the program, known as A B split testing – this will grant you the right formula for a great campaign.