It will probably come as no surprise that word-of-mouth recommendations account for 65% of new business according to the New York Times. That means that the majority of your new customers have heard about you from a friend or trusted resource and decide to come in and see for themselves what others are raving about. And get this - customers who are referred to your business end up more loyal than non-referred customers.
Word-of-Mouth Marketing is formally called Referral Marketing and deemed as one of the most powerful tools for marketers and business owners. Inspiring folks to talk about your business is key in building a brand that customers trust.
The question of how to get people to talk about your business and recommend you to others, online or offline, may seem tough to answer. Just starting your business? Referral Marketing is especially important as it has the potential to impact most of your new business. And for an established business word-of-mouth is essential to maintain and grow business.
In order to inspire conversations about your product and create a successful referral program, here are a few tricks:
Offer the best, reliable product and service possible
A good place to start is by taking a critical look at your business. Ask friends or business colleagues for their input following a shopping or dining visit and focus on overall customer service and products offered. Online reviews can be super helpful with eliciting feedback and are also an integral part of building a strong Referral Marketing basis. And there’s also nothing wrong with setting up an old-school suggestion box if you need to get more input - the takeaway is to show that you are listening to your customers.
Next, ensure that your employees are alert, making eye-contact, smiling, and greeting customers. Managers and business owners should visibly model outstanding customer service and provide in-the-moment coaching for employees - which means you have to be present to do a customer-service audit on a regular basis. Even if you have a great manager or management team, it doesn’t hurt to show up and demonstrate that you can practice what you preach. In order to get your customers talking about your business, your customer service has to consistently exceed expectations.
Finally, your product itself needs routine auditing as well. Everyone has the occasional “off” day, but consistency is a major part of repeat business and your loyal customers are your best potential advocates. A customer who loves your cobb salad will put up with missing avocado once, as long as it doesn’t become a trend. Similarly, if you are sold out of a popular item, your customers will accept will deal with it, but if they can’t rely on you having regular inventory, what’s to stop them telling a friend that your business just isn’t what it used to be. You can avoid a negative or mediocre experience simply by being consistently awesome.
Discover the best strategy to ask for referrals for your business
There are a few ways you can approach asking for referrals. In some situations, asking a customer to ‘share the love’ makes sense and won’t come off as desperate or demanding. If a customer is giving you a compliment, then saying, “Thank you so much! Please tell your friends about us - we can always use great customers like you” is a perfectly acceptable way to ask for a referral.
The biggest fear in asking for referrals is, of course, that you’ll come off as needy. And not every interaction with a customer is going to be one that lends itself to asking for a referral, even if the interaction is a positive one. A smart way to deal with asking for referrals directly is to offer your customers something of value to them that will motivate them to share your brand with others. You will have to put your creative thinking cap on to develop the appropriate asset for your customers to share, but once you have, you will have a concrete marketing tool.
Let’s say you have a pet grooming and supply store. If you offer visitors a printed guide or website blog post offering tips for training your puppy to walk on a leash, you have just just given your customers something they can share with a friend with a new puppy, for example. You can include your store info and even a coupon to encourage sharing and repeat business. By offering valuable content to your customers, you have just established your brand as trustworthy and showed them that you care about them.
Guess which pet grooming store is going to be the one they remember to tell a friend about? Great marketing creates positive associations with a brand and the good news is that the brand gets to offer some help in a fun, creative way to their customers - it’s a win-win for everyone.
Utilizing technology to strengthen your Referral Marketing tactics
While there are many ways to go about drumming up new business, technology can certainly make the process more efficient. Big companies like Uber clearly utilize sophisticated technology to create referral codes for their customers to refer friends to Uber and then to incentivize both the person referring a new customer, as well as the new customer with a discount for joining. For service-based businesses, this strategy works great. But if you have a retail shop or cafe, for instance, it may be a bit more challenging to utilize things like referral codes.
That said, a robust point-of-sale system will allow you to create coupons and specific discounts for new customers or even for loyal customers who are consistently bringing in friends to check your business out. For example, you can utilize coupons and create a promotion for customers that allows a friend to join them for free or at a discount. Choosing a POS that integrates with savvy CRM platforms or that will allow you to integrate through open API is another option for businesses who are ready to capitalize on marketing to their customer base.
Engaging with customers through Online Ordering and utilizing e-Commerce are other ways to ensure that you will have lots of opportunities for promoting your business and will give your customers an easy way to spread the word.
And don’t forget to do some referring yourself! Following your favorite businesses on social media and recommending other great businesses in your network or community is always a wise idea and encourages other businesses to do the same.