Why Referrals Make Great Sense for Your Business

Despite the deluge of social media, and paid advertising nothing can beat referrals. These are absolute gold for any business.

1 – Acquisition Costs Are Minimal

Your happy customers are doing the marketing for you. Of course, this only happens if you give good service, are attentive to your customers’ needs.

It means going the extra mile to stand out from the crowd.

  • When people are happy with your services, they will keep doing business with you and recommend you.
  • The market place is crowded and advertising is an expensive hit or miss exercise. You pay to play.
  • Getting your message to stand out amongst all the noise is difficult. This is where referrals come into their own and are a powerful source to be harnessed.

With a referral, the promotion happens naturally. It is not something you are paying for.

2 – Conversion Rates Are Higher

A prospect introduced to your business or product by someone they trust is far more likely to convert into a new client/customer.

Knowing when and how to spot a potential referral opportunity is a good way to kick-start your referral system into gear.

Here are a couple of methods:

  • When a happy, satisfied customer comes along and gives good feedback, grab the opportunity to ask them to spread the good word about your business.
  • Stay in touch with previous customers by conducting after-sale follow-up. This lets your customer know they are valued and not everything ends once the sale/job is done.

If you’re like me, you prefer to place your trust in a business that comes recommended by somebody you trust.

This is especially important when there are significant amounts of money involved or it’s a specialised service.

How Referrals Work

Although referrals can be spontaneous they are most often a result of your conscious marketing efforts.

#1 You need to ASK for referrals.

Never assume that people will refer automatically.

An unhappy customer will spread the word loudly about your business. Conversely, a happy customer is less likely to talk about their satisfaction unless prompted.

Weird right? But that’s the way it works.

#2 Ask new customers how they heard about you.

If it was via a referral, make a point of contacting the referrer to thank them for recommending your business. It’s another touch point for you with your satisfied customer, and it’ll make them feel valued.

If you haven’t got a referrals system in place, it’s not too late to start. It also does not need to be complex and if you are a small business with limited cash flow, it can be done on a shoestring to start you off – ask me how to get started.

To your success!


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