Referral Marketing for Loyal Clients is a Win-Win!
There is probably no stronger advocate for your business than a happy customer. And studies have shown that word of mouth from family and friends is a strong channel for your small business to gain new customers. In fact, Nielsen reports that 92 percent of folks trust a recommendation from someone they know.
So how can you take advantage of that for your SMB? Create a referral marketing program for your loyal clients! It’s a strategy in which everyone wins.
What IS referral marketing?
Referral marketing programs allow your existing customers to share your SMB’s brand with friends, family and colleagues.
Here’s how the process works:
- Referral marketing uses word-of-mouth tactics in which your customers tell their family and friends about your product or service.
- When one of those referrals use friends use your product or service then the loyal customer is rewarded.
- Finally, you have gained a new customer!
By using this type of program, you may be able to expand your customer base to people you might not have been able to reach previously.
How referral marketing can help your SMB
Once you decide to give referral marketing a try, make sure to review your overall marketing roadmap to stay in line with your goals for the year. In fact, by reviewing your roadmap, you may get a better idea of what the offer should be or how it should be promoted to your target audience.
Referral marketing is a very cost effective way of marketing your business. In essence, you only pay a reward to your current customer after the new customer has made a purchase or whatever event you consider to be valuable in generating revenue (i.e. the referred company books a meeting with you).
In addition, you have created a new advocate for your business with your current customers, which can deepen the loyalty they feel for you…especially if their family and friends have a good experience as well.
A study from the Wharton School of Business found that customers who were referred were more valuable to the business than other customers, even within the same demographic.
Referral marketing can not only boost your bottom line, but it can deepen the relationship between you and your customers.
Some Examples of Successful Referral Programs
Obviously, your referral marketing program will be based on the product or service you offer. However, it is interesting to look at some popular referral programs that are working well for other companies.
Dropbox lets you collaborate, store, and share files from a central cloud platform. Inviting a friend to use Dropbox scores an extra 32G of space on your account if the friend opens an account.
Chase Bank is a part of the JPMorgan Chase financial services company. They offer customers $50 when a friend opens up a checking account.
Walmart is fairly ubiquitous in the US. But even their grocery store has a referral program that is popular. By telling friends about the pickup and delivery service, friends get $10 off their first order. And loyal customers who referred them get a $10 gift card when that first order is completed.
How to Promote Your Referral Program
- Email. If you have a list of emails that you send to on a regular basis, such as a newsletter or other update, letting your customers know about your referral program through email should be easy. You can send your referral code or link out to subscribers, along with a brief description of how the program works,
- Website. Your website is (or should be) the hub of all of your marketing activities. Having a prominently placed message letting customers know about your referral program is a natural place for promoting your referral program. You can even use this space to go into a bit more detail or even provide an FAQ.
- Social media. Utilizing whatever social media channels you use on a regular basis, post inviting copy to go along with your referral link. Asking others to share that link on social media also makes good sense.
Creating Value for You and for Your Customer
By adding a referral marketing component to your marketing efforts, you can add value for everyone and make it a win-win. On one hand, you are establishing deeper relationships with your existing customers, and on the other, you’re building your customer base with new clients.
Having a strong, high-quality brand takes time so be patient and have a strategy.
In fact, if you are ready to look at your business strategy as a whole, we’ve got some help for you. First, take this short, free quiz and we will give you an idea of how strong your sales and marketing foundation is in a few key areas (brand, CRM, and online presence). We’ll get you a quick foundational score so you know where to start strengthening your SMB’s marketing.
Tomato Fish Is An Indianapolis Consulting Company Focused On Helping Small And Midsize Businesses Make Good Strategic Planning Decisions.