How Businesses Build Growth Through Referrals
We all know the adage, “It is much more expensive to acquire a new customer as compared to retaining an existing one”. That is why business owners should adapt to different ways in getting more business such as through social media, or through the implementation of loyalty programs, and even through plain old referrals.
But first, what are referrals? A referral is the act of an existing customer recommending or vouching for the value of a company’s products or services to another. This is a very powerful tool in the arsenal of a business owner, in that, out of all of the different ways one can get a customer, nothing beats getting natural referrals. A study by customerinsightsgroup.com found that there’s a significant relation to purchasing behavior to when someone shares or talks about a brand on social media. Point is, people are willing to buy, when it was recommended by someone they personally know and trust.
One other reason why referrals are really great, is that referrals usually generate more referrals down the line. Since satisfied customers will usually give a lot of referrals over a period of time, what happens is that the business that comes from referrals tend to grow exponentially if you track them.
Brand new Leads are Expensive
It really depends on the industry, but typically, acquiring new leads for new customers is very expensive. And you’re not even sure if they’re going to become your usual customers, so this inevitably comes off as a huge expense for your business. As compared to a referral where it only costs good customer service, and experience. If you’re able to impress your customers with your product, or service, rest assured that you’re going to get referrals from your customer who was impressed.
Easy to Close Sales
Prospects who were referred by existing customers have a higher chance to close the deal. These prospects of course were referred by a trusted source, such as a close friend or a family member. This makes it easy for a business to pitch their product or service to the referred prospect, making the sales process a lot quicker than anticipated. Doing business with a referral is quicker, more efficient, and much more profitable. This is why businesses should also focus in getting referrals because these can be considered almost free in exchange for a lot of long-term earnings.
How to get Referrals
Here is a list for discerning business owners to get their own referrals. If one is able to effectively execute any of these, rest assured that his/her business will enjoy a lot of sales and growth.
- Exceed customer expectations
To get customer referrals, it is of the utmost importance that you go well and beyond what your customer expects. When a person gives out a referral, they are recommending a part of themselves to another person. So this means, they will only refer businesses or things to another person, if this is something that they can be confident about.
2. Create a Referral Program
If you don’t create a referral program, chances are you will still get referrals because this is something that naturally happens when you deliver results to your customers. Nonetheless, creating a referral program will drastically increase the likelihood that you will get new customers who were referred by your other customers. By incentivizing people to invite their friends and families to try out your business, you will encourage them to spread your brand through word of mouth. Do not let new business only come from chance, increase your odds and start thinking of ways to create your referral program.
3. Referrals can come from different ways
Some people get iffy when they’re asked for names during the sales process. This is no problem in that, there are a lot of different ways to get referrals from clients. Even just sharing your business’s Facebook page is one of the newest ways to refer a business. Online reviews also come to mind, as well as asking them to post something on Instagram. Remember, social media is a direct attachment to a part of themselves, so when they post something that includes your business in a positive way, that means they are identifying with your brand and effectively referring it to their network.
Referrals are a natural way of acquiring new customers, and is usually gotten from giving quality customer experience. So in order to boost sales and drive growth, being able to understand how important customer referrals are will surely change how you interact with your customers. By giving excellent customer experience and creating a referral program, you create an avenue that enables your business to acquire new customers for almost nothing. Taking care of your customers will end with them taking care of your business.
