What is Referral Marketing?
We all know that marketing is essential to any business and as an entrepreneur it's no different
. Finding a way to market, that is cost effective can mean the difference between an average year and a successful one. So what is referral marketing?
Referral marketing simply means using your existing clients to expand your reach and influence to new potential, and hopefully referring clients. There are a number of wonderful reasons why this process works as well as it does.
One of the main problems that many businesses run into when introducing their product or service to a potential client is making that first contact. Sure, cold calling may work a percentage of the time, but it is very rare when a referred client doesn't become a new client. Why? It's simple really. Basically people are quicker to trust and believe what their friends and family have to say. For instance, if a new restaurant opens up in your area, how quick are you going to go visit? Now if a family member or friend visits and comes back with raving reviews, how quick will you visit? That's referral marketing!
So the question becomes how exactly can you get a referral for your product or service. You already have quality and reliability; you wouldn't be here with a growing business if you did not. But it's always a good idea to continually improve your product or service. Next comes the hard part for some people. The best way to get a referral is to ask for one.
Surprised? Now of course it would be great if someone would spontaneously recommend your business to friends or family, but it doesn't always work that way. More often than not, people have to be reminded, ever so gently; of what you can offer and provide for the people they know.
There are two basic schools of thought when it comes to asking for a referral: passive referrals and active referrals. Which one you use depends greatly on your business style, your personality, and which one works best for your needs. Use one or the other, or both, depending on the situation at hand. The bottom line is to use what works.
An active referral occurs when you ask specifically for the contact information for someone that your client knows. This approach is most effective in those situations when the client themselves doesn't have the time to go out and spread your praises. All they need to do is provide the contact information for someone that would be receptive to your message. What could be easier than that? It's not cold calling at that point, because you have their name and the referral source.
The passive style of getting a referral occurs when you provide your personal contact information to your client for distribution throughout their contacts. While this method may take you out of the driver's seat, it can still be a very effective way to get referrals. It is best used with clients who value their friends' privacy and are hesitant to provide their information. By allowing them an active roll in the process, they will feel more in control, and there will be less pressure.
Now, just like anything else, there are good and bad points to each referral method. For example, the active method of gaining a referral can sometimes come across as being too aggressive. However, the passive method might come across as you not believing completely in your product or service. Each method also has positive qualities. The active approach lets potential customers know that you are passionate about what you have to offer; the passive one lets those providing the referral know that you trust them.
Whichever method you choose depends greatly on the situation at hand. Referral marketing, if used correctly can become one of your most beneficial tools in business plan. So, what are you waiting for?? What method resonates best for you and why?
What is Referral Marketing?
By: Carrie Wilkerson
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