Whether your business is based off networks or e-commerce, relying on one-time purchases or consistent subscriptions, referrals, the oldest form of advertising, are a great way for businesses to expand their customer bases successfully with minimal cost.
Why Are Referrals Great for Your Business?
According to the White House Office of Consumer Affairs, referred customers have a 16% higher lifetime value than non-referred customers, which is why it is considered the second most valuable form of lead generation.
Referrals are also good for consumers; 92% of consumers trust recommendations from family and friends more than any other form of marketing. Recommending customers know their family and friends the best, meaning referrals equal more happy customers.
Referrals are a win for everyone involved; recommendations can provide your business with credibility, minimize consumer doubt, and create positive impressions of your business.
So, why don’t more businesses use them?
Why Don’t Businesses Use Referrals More?
First, they don’t ask.
While referral requests can be as direct as asking a customer to recommend you to family and friends, they can also be as subtle as a final line in an order confirmation email.
If you are a business that cannot afford to incentivize referrals, it is best to ask for a referral upon closing a sale or upon being complimented while the customer is excited.
If you can incentivize referrals, it makes things a little easier. Consider setting up a referral program that provides customers with your services at a reduced price or for free after each successful referral.
Referral systems, when done intentionally, can be extremely successful and strengthen your customer relationships, ensuring consumers keep coming back.
But businesses tend not to do referrals well. Being intentional in identifying your target referral audience, choosing incentives, and most importantly, making it easy for customers, is important.
If you want to go a step further, referral platforms and tracking software are great ways to create systems that are more effective and intelligent for your business.
Referrals Can Make Your Business More Profitable
Do not let a fear of rejection prevent you from cultivating relationships with your customers that will help your business grow and thrive.
Referrals are a mindset, and one that can make your business more profitable if adopted and done well.
Not Sure Where to Get Started?
If you are interested in creating a referral network but are unsure where to start, we can help. The AJA Marketing team will work with you to determine the best sources of referrals for your particular business.
Together, we can develop a system to identify potential referral sources, develop outreach, tracking and then determine the success or ROI of your newly established referral network.
As a woman-owned, small business, we know what it feels like to have a passion for the work you do, and a desire to share it with the world. Help us help you!