Can Referral Marketing Help Your Small Business?
Can Referral Marketing Help Your Small Business?
We regularly seek the advice of our family, friends, and colleagues for any number of things: books, vacation destinations, recipes, the list goes on and on. The concept of referral marketing for your products and services is no different. Word-of-mouth referrals from satisfied customers is an extremely influential marketing method, particularly when your product is of exceptional quality.
Referral marketing is a powerful tool for three reasons:
- Your satisfied customers know your audience better than the targeting tools in Google Adwords or Facebook Ads. These customers have an inside perspective having done business with your company giving them a keen understanding of what you offer. Since they have firsthand experience with the value your business provides, they can refer qualified leads.
- No marketing or advertising campaign can ever be as trustworthy as the recommendation of a friend or family member. Think about it. If your sister tells you about this incredible restaurant that makes the best food she’s ever had, you trust her to know what she’s talking about and you’re on the phone to make a reservation. However, a review of that same restaurant written by some stranger isn’t going to powerfully motivate you the way your sister’s recommendation might.
- Happy clients now have huge networks of people available at their fingertips. From a smartphone, a person can influence hundreds of others to either get behind your business or bash it irreparably. An Instagram post or a Yelp review can make or break a small business.
Whether or not you realize it, your business is already engaged in some kind of referral marketing process. However, if you aren’t actively involved in the process, your customers are in control of your company’s brand story. With some of these referral marketing ideas and strategies, you can work with your happy clients to really profit from their word-of-mouth.
Ask for Introductions
The phrase “it never hurts to ask” has a lot of value with referral marketing. If you have a client that can’t get enough of your business, it’s OK to ask them if they know of anyone else who might benefit from your services. If they do, see if this client is willing to make an introduction. While this referral marketing strategy might seem too forward, customers are happy to support businesses that they like. Once you’ve asked a few customers to make these introductions, you’ll discover just how beneficial this simple question can be for your lead generation efforts.
Expand Your Network
You aren’t limited to asking only current, satisfied customers for introductions. Colleagues, friends, family members, industry connections – the sky’s the limit. It’s not as though a small business owner gets an all-seeing crystal ball when s/he launches their company. You can’t say for certain who your next big client will be which is why you have to ask everyone you know to introduce you to potential leads. Your cousin might know someone shopping for your product. Maybe your college roommate works for a company that desperately needs your services.
You can include direct calls-to-action for referrals in almost every marketing channel. Add it to your email newsletter. Write a line about it in your blog posts. Program it into your email signature. Post your needs on social channels. The more you incorporate referral marketing into your overall business strategy so every employee is reaching out for introductions throughout the day.
To increase usage, Dropbox instituted a referral rewards program where users earned free storage space for anyone they referred. The person referred also earned extra space when they signed up. This initiative expanded Dropbox’s user base from 100,000 to 4 million in 15 months without spending a cent on ads.
Data from the American Marketing Association reveals that rewarding referrals increases the likelihood of people making these introductions. Additionally, the size of the reward doesn’t have to be massive for it to be impactful, so you don’t have to allocate a huge portion of your budget to this referral marketing strategy. Instead, find a way to provide real value to the clients who make introductions with rewards they’ll be thrilled to receive.
Partner with Other Businesses
Combine the resources of two companies for one common goal: increasing business. Find another small business that accentuates your company and host an event or promotion together. By doing this, you can reach a new audience that is ripe with opportunities for introductions and potential leads. You can also try co-branding content, such as blog posts, to increase visibility and generate additional referrals.
A person is four times more likely buy something when referred by a friend, according to research from Nielsen. Businesses see real results when they invest in referral marketing strategies. If you or someone you know needs some assistance building a referral marketing program, Alt Creative can help. Contact us now to discuss building an effective referral marketing program for your small business.