It is vital for every small business owner to master the art of Referral Marketing.
Referral Marketing (also known as Word Of Mouth Marketing) is probably the most cost-effective way for any entrepreneur or freelancer to build up their credibility and gain new clients.
In simple terms, Referral Marketing is getting people to talk about you in a favorable way, thus helping you grow your business.
While it can take a lot of time and discipline to be an effective Referral Marketer, the gains are undeniable. Referral Marketing has a high conversion rate, as people would rather buy based on a recommendation from someone they know as opposed to responding to an anonymous ad or listing. On average, two-thirds of consumers make purchases because someone they know recommended a particular product or service.
Referral marketing is a process to increase word of mouth marketing by encouraging customers, partners and contacts to talk about your brand, product or service to their contacts. When someone is looking for a solution to a problem or a specific product they will often begin by asking their connections if they know of someone. Referral leads convert roughly 30% better than leads generated from other marketing channels. (Tony Nissen, R&G Technologies, 2013)
In theory, Referral Marketing is quite simple. But it can be daunting to put into practice. Here are just a few ways to help you become an expert Referral Marketer in no time:
Don’t underestimate anyone
Everyone you know could be a part of your Referral Marketing network. Don’t underestimate anyone. Remember, it’s not just the people you know who matter, but it’s also who they know.
Referrals can come from friends and family, customer reviews and opinions, networking, blogs and social media influencers or testimonials. All of these channels can provide great referrals as long as the person who receives the message has confidence in the source
Most of all, don’t forget your customers. Don’t be shy about asking your past clients for business referrals. In fact, satisfied customers like helping out businesses that have helped them out. It makes them feel good. A study by Wharton School of Business showed that 83% of satisfied customers are willing to refer products and services.
Give, give, GIVE
People naturally like to help people who have helped them first. So if you want people to refer your business to others, you need to do the same for them.
I had a chat with Cindy Mount, a BNI Director and Referral Marketing Trainer, about how a business can find success with referral marketing through networking. Mount suggests to look for partners not prospects. Who is it that can help you and how can you help them? This is known as the Givers Gain Philosophy.
Make it easy for your Referral Partners
When talking to someone about referring your company, be very clear and succinct about what your company does and what services or products it provides. Spell out who your ideal client is.
Mount says to start with your brand. You need to know who you are, what you are about and how you are different. Once you know this you can build a referral strategy and grow your business faster.
Actively seek out new Referral Partners
You can’t be passive when it comes to Referral Marketing. Actively seek out meetups, business events, social events, seminars, workshops, classes and networking events. Consider joining a networking association such as BNI.
Be strategic in your search. Mount suggests that you have to know what you are looking for and create a plan on where to find the right groups.
Stay in touch
Going out and meeting person after person is great, but you need to stay in touch and nurture these relationships over time, otherwise you will just drop off their radar.
Respect the connections you make and work hard to keep them. If you do this, your results will snowball, and your Referral Marketing strategies will give you better and better outcomes with less effort.
Keep an up-to-date database of your Referral Partners. Call them periodically, take them out for coffee or lunch, engage with them using social media or an email newsletter. Stay top of mind.
Need a hand with your business brand and marketing? Call Kim Speed at Purple Moon Creative today!!
