Referral Marketing: A 5 Step System
Getting referrals from your past and present customers is one of the fastest ways to build your business..
. and also one of the cheapest.
It is essential to your business success that you get all of your satisfied customers to refer to you their friends, family and colleagues.
Anything that somebody else says about you is infinitely more powerful than anything you can say about yourself.
Robert Cialdini PhD , wrote in his book 'Influence:'The psychology of persuasion'... that social proof was powerful , that we look to others to guide our behavior [even though it may be done unwittingly].
We are much more likely to act on the enthusiastic recommendations of a friend or family member than we are on anything we read in a newspaper.
When someone is referred to you from an enthusiastic satisfied customer they are already pre-sold on you and your company.
It is much easier to convert referrals into new customers [some sources quoting as high as 40%] compared to converting a new lead who doesn't know you into a new customer [approximately 1% on the Internet].
Getting your referrals must be systemized. It must be done in the same way every time. And at the same point after the sales process.
How this is done will depend on the nature of your business:
>phone script
>email
>snail mail
>person-to-person
An example of a referral system you can use in your own business.
1. Ensure that your product or service is excellent
If it isn't... fix this first. This is true of any marketing. Getting new leads when you have a poor product or service can be disastrous. It just spreads the word quicker about your poor offering.
2. Ask every satisfied customer for referrals
Do this directly after the sale has been made and you have checked that they are happy with their product or service.
3. Recognize and reward
Recognize a customer every time they make a referral, either send them a thank you note or give them a call. Send an appropriate gift whenever a referral buys your product or service. The value of your gift will depend on how much each new new referral is worth to you. Examples... A bottle of wine, flowers, theatre tickets etc.
You could go to the next step and hold a monthly luncheon for all your customers who refer. Make sure they bring along any friends or family, who they feel would be interested in your business!
Consider holding an annual awards dinner way you give out prizes to all your customers who give the most referrals. Make sure to invite the press along for picture opportunities. Invite local celebrities, present and past customers and potential new ones.
4. Tracking
Record and monitor your system:
>who refers
>how many they refer
>how many go on to buy
>the lifetime value of each referral
>whether they are referred by mail,email, phone or person-to-person.
5. Keep records
Follow up with all your new referrals. Use a sequence of multimedia marketing to convert them into a new customer. Once they buy add them to your customer database and follow up with them rigorously.
Other things to consider:
>decide on how many referrals you want from each customer
>what the criteria for a good referral is
>decide how to contact your customers
>write a thank you note template
>write a referral letter template
>decide on the reward to give
Referral marketing has been proven to work across all industries. You have the basis for a system for your own business here. Set yours up today. Aim to have your system up and fully running with referrals coming in by the end of this working week.
by: Mark Holmes
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