If you’re looking to grow your customer base, there’s few ways more powerful than referrals. Referrals are when one customer, client, or vendor tells another customer to check out your business, whether through social media shares, forwarded emails, or word-of-mouth. If you’re ready to watch your business grow, check out these top tips for how to get referrals through your own referral program or organic referrals.
What Do Referrals Do For Your Business?
Referrals are a powerful form of marketing every business should be taking advantage of. Utilizing the power of word-of-mouth, referrals generate powerful return business in a cost-effective way. Here are some of the top benefits referrals have to offer, featuring statistics provided by review42.com.
- Creates Trust With New Customers: Customers overwhelmingly referrals from friends and family over traditional marketing. For example, when customers are referred by a friend, they are four times more likely to buy a product, and 92% of customers trust a referral from someone they know.
- Even Businesses Trust Referrals More: B2B businesses with referral programs enjoy a 70% higher conversion rate than other B2B companies, making referral programs essential for business growth.
- Offers Effective Marketing: While other marketing forms are important and helpful, referral leads offer a 30% higher conversion rate than other sales leads.
- The Effect is Cumulative: One referral gets you a lot more than just one customer. Customers who are referred are four times more likely to refer another person themselves!
- Generates Valuable Brand Exposure: You want customers talking about your brand, and referrals are a great way to get the ball rolling. Offline word-of-mouth impressions have been found to increase sales 500% more than impressions from paid advertisements!
- Creates Lasting Return Business: Customers who are referred are more likely to stick around as return customers with a 37% higher retention rate than other customers.
Love statistics that boost your sales? Check out our other blog post featuring 25 mind-blowing statistics on the power of promotional products!
How to Create Referral Programs for Small Business
The most effective way to get referrals is through a referral program. This allows customers to quickly and easily refer friends and family in exchange for incentives, allowing those referrals to join the program and get incentives of their own. This allows a web of referrals to grow quickly, expanding your customer base exponentially in a short period of time. Sound exciting? Here’s how to create your own referral program.
- Identify Your Target Audience: Before you go soliciting referrals, make sure you know who you’re trying to reach. For example, if you’re after a younger audience, social media is a great place to seek referrals. Need some help? Check out this blog post about finding your audience.
- Choose an Incentive: While you can earn natural referrals, a referral program needs incentives. Are you offering money? Discounts? Free gifts? Exposure on your site? Whatever you choose, make sure it’s something of interest to your target audience.
- Temper Your Expectations: While customers will jump through all sorts of hoops to get free things or discounts, you need to be realistic in what you’re asking. Are you asking them to vouch for something they haven’t tried? Make false claims? Only ask your customers for honest referrals, or else you’ll scare away more customers than you earn.
- Choose Your Platform: Are you going to ask for referrals on your website? Social media? Emails? Find a platform that best reaches your target audience and allows them to refer customers the way you want them to.
- Choose Your Tracking Method: There are a lot of ways to track referrals reliably, but one of the most effective ways include customers creating a login on your website. With a login, you can track their referrals with referral codes tied to their account, track emails or shares sent from their portal, and more.
- Get Marketing: Once you have your referral program in place, you need to make sure customers know about it. Use your social media, newsletters, and other marketing avenues to spread the word to get the referral ball rolling.
Creative Ways to Get Referrals
While a referral program is an effective way to get referrals fast, there are other ways to get organic referrals that you can take advantage of right now. Fun, engaging, and made for excellent first impressions, these creative ways to get referrals can easily be used by almost any business in any industry.
- Start a Blog: Good content counts as a referral incentive, and customers love to share a quality blog post when they find one.
- Get on Instagram: Trendy pictures can inspire customers to like and share. Plus, if you have a referral program, Instagram is a great place to spread the word.
- Solicit Unboxing Videos: One referral can earn hundreds of customers when that referral comes from a popular Youtuber, and customers trust a product more when they’ve seen it unboxed.
- Host a Giveaway Event: Everyone loves free stuff, and customers will call in their friends and family to share the branded swag if you offer an exciting promotional event for distributing it. Check out this blog post showing how to host your giveaways on social media.
- Be Present in Your Community: Build trust in your local community and encourage customer loyalty by being present in community events such as fairs, fundraisers, and more.
- Offer Two-For-One Friend Specials: Want your customers to bring their friends? Offer a two-for-one friend special where customers can treat their friends for free!
Looking for more ideas? Check out our original blog post featuring 5 marketing tips for gaining referrals.
How to Get Referrals From Clients and Vendors
Customers aren’t the only ones who can give you powerful referrals. Other businesses have access to lots of customers, making your business clients and vendors an excellent source for new customer exposure. If you know other business owners in your area you’d like to connect with, here are a few ways to set up your connections to give you lots of customer referrals fast.
- Offer Partnerships: When you partner with other small businesses, it benefits both parties for the other businesses to refer you to their customers. Find other businesses in your area that have complementary goods or services that can benefit your business and expand what you offer, then solicit referrals so you can grow your customer base to include all of their existing customers.
- Exchange Referrals: You don’t have to be joined permanently with another businesses to solicit referrals. Offer an exchange where you refer your customers and they refer theirs. This way, both of you can double your customer base.
- Offer Investment Opportunities: Vendors and business clients need incentives just like customers do, and one of the most effective incentives is the growth of your own business. Use public or private investment options to encourage other businesses to be invested in your success.
Just like a compound interest investment, customer referrals build on each other to create fast and sustainable growth for your business. This makes them a no-brainer investment for any business looking to expand their customer base and grow their revenue, whether you’re just starting out or looking for a big business boom to get you to the next level. Ready to get on that Fortune 500 list? Learn how to get referrals with your own referral program and organic referrals.