In today’s competitive world, “word of mouth” marketing is probably the most coveted of all since it’s the most reliable and definitely the most cost-effective way to grow your business. Referrals are most sought after since someone has actually experienced your offering and is recommending the same to someone else. That makes it the most reliable and hence it also doubles the chances of the lead getting converted into sales.
According to a report by Nielson, people are 4 times more likely to buy a product when it is being referred by someone to a particular business. It is also estimated that customers who are referred are more loyal and can spend more on a long-term basis according to researchers at Wharton and Goethe University.
Now the question is how do you get those referrals for your product or service? Let us look at five ways that can get you good referrals for your business
- Offer “best-in-class” customer service:
Your customers are constantly giving you feedback – if you choose to listen. And each feedback, good or bad, is a great opportunity for your brand to shine. Take the example of three year old Lily Robinson who wrote a letter to Sainsbury saying their tiger bread actually looked like ‘giraffe bread’. The customer service head saw this as a fun opportunity and not only responded to Lily’s mail but gave an explanation on why the bread was called so and a $3 gift card. Lily’s mother posted the letter on her blog and within no time, it went viral. They even went on to change their bread’s name citing Lily’s feedback.
All this put the brand in a positive light and build up its goodwill among existing customers. There is a good possibility that many new customers who hadn’t tried the tiger/giraffe bread were now curious to try it out.
- Social as a source of referral:
According to Brandwatch, 96% of the people that discuss brands online do not follow those brands’ owned profiles. Juxtapose this with another statistic that says “2015 Facebook influenced 52 per cent of consumers’ online and offline purchases”. There is no doubt that most of your consumers exist on various social channels and many of them are talking about you and influencing purchase decisions of new customers. Do some hard listening beyond your profile. Thank each customer who is spreading a positive word. Listen to those who are angry or dissatisfied and be proactive in solving their concerns. If customers know that you are ‘accessible’, they’ll be more open to giving your products a try.
- Highlight your best referral sources:
Your loyal customers are the ones that need the best of your thank yous because they’ll love to refer you anytime, anywhere. Take the example of Christina McMenemy who stayed at the Gaylord Opryland hotel three years in a row and fell in love with their alarm clock that played soothing music. She simply loved the fact that the sounds helped her sleep better and searched high and low to find a clock for herself. When she couldn’t, she wrote to the hotel on Twitter asking where she could get one. During the exchange, Gaylord recognized that Christina was a loyal customer and sent her not one but two alarm clocks.
The interesting part is that the brand did not call out these stories. Their customers did all the talking and got all the positive attention for the brand. (source: https://www.helpscout.net/10-customer-service-stories/ )
- Propose an incentive:
A referral bonus is the oldest trick in the game. Use it, recommend it, and get more of it. One of the best examples of this comes from Dropbox who offered extra storage space as a reward for referrals who joined them. Needless to say, the trick continues to work like a charm and got Dropbox into the big league for cloud storage and sharing.
- Ask to refer your business:
According to Texas Tech University, 83% of consumers are willing to refer after a positive experience—yet only 29% actually do! Some referral programs run by themselves because of your great customer service and word of mouth that goes on an auto-pilot. Yet, most referral programs need an extra push and don’t miss out on any opportunity to ask for a referral.
Conclusion: Compared to traditional marketing, referral marketing is neither time-consuming nor expensive. It is one strategy you cannot choose to ignore in your marketing mix.