Building a Referral Program that Brings New Business

By Karen McNeill, Sr. Marketing Consultant, The Spectrum Services Group

Referrals can be one of the most cost effective ways to earn business. Generally when a potential customer is referred to you they are already ‘pre-qualified’. This is due to the fact they were referred based on a need they communicated to someone who in turn sent them to you. This ‘pre-qualification’ will typically speed up the sales cycle and put money in your pocket sooner!

A business poll found that 82 percent of small businesses use word of mouth to grow their business, and 15 percent rely exclusively on referrals as their source of marketing. However, getting your customers to refer you takes forethought as well as a little bit of work. The foundation of a successful referral marketing program is having a base of loyal customers, even one loyal customer will do, who enthusiastically refer you to others. They key, however is to provide extraordinary customer service and educate clients regarding your referral program. If you don’t actively cultivate referrals you’re just leaving it to chance.

So what are the building blocks for developing a referral program? The first step is to be sure you have a solid core message that emphasizes the value of the products and services you bring your clients. A good core message communicates the purpose of your business, measures success, creates a vision for the future and acts as a filter for all of your marketing decisions.

Second, you want to identify your best clients. The group that is not only satisfied, but loyal to your organization. This group may vary in number from one or two, to several. Regardless of the size, if they are loyal and motivated to refer you this team is going to be instrumental to your referral program.

Next, you should be committed to learning as much as you can about your competition. In order to differentiate yourself it is crucial that you know who your competition is, what they offer, and how they deliver their message. Knowing what makes you different (and better) will help you continue to build upon the foundation of your referral marketing message.

Last but not least, if you expect your customers to refer you, you need to make sure you are referable. By providing excellent customer service, and going above and beyond whenever you are given the opportunity, you will earn their trust and gain their respect. Being friendly, professional, positive, consistent, genuine and enthusiastic will help your customers feel comfortable when they refer people that are within their realm of influence.

[1] Word of Mouth Takes Action, by Jeff Cornwall – July 6, 2008 – http://www.drjeffcornwall.com/2008/07/word-of-mouth-takes-action.html

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