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Customer referrals are the lifeblood of any business. Ever wonder why people always say that word-of-mouth marketing is the best marketing? It actually comes down to the numbers. It costs money to get new customers in business. You need to advertise, spend money on marketing campaigns, or pay salespeople. In fact, each method you use to attract new customers can be broken down into a unique customer acquisition cost. For example, if you spend $1,000 on ads to get 10 new customers, your customer acquisition cost is $100 per customer.
When you get a customer referral, on the other hand, it costs you nothing! Aha! The beauty of word-of-mouth marketing! In this article, we will explain the top 5 ways to drive more referrals for your business…
1. Ask For Referrals
Simple enough, right? But most people do not put in the effort to ask their customers for referrals. The best time to ask for a referral is when your customer is very happy with the product or service you provided. At that time, they might be inclined to give you the names of a few friends who might need your service.
Pro Tip: Be specific when asking for a referral. Ask your customer for 3 names of people who might need your service. Or, ask for a specific type of commercial account (e.g. a restaurant).
2. Offer To Pay a Referral Fee
Remember customer acquisition cost from above? It’s important that you learn what your costs are by marketing or advertising channel, and across all of your campaigns. If it costs you $100 to acquire a new customer, then you can afford to pay $100 as a referral fee. If you want to be ahead of the game, offer $25 or $50.
Offer the fee in the form of a gift card or currency
Have an official referral program with rules
Market your program to existing customers
Pro Tip: Visa gift cards are a great way to offer referral fees to customers. You can purchase them at any CVS or Walgreens and they are as good as cash!
3. Do Superb Work!
Nothing beats quality work! In fact, most word-of-mouth marketing comes from customer satisfaction. Focus on your craft and what you do best, and let the details take care of themselves. People will always recommend businesses that offer exceptional service.
Pro Tip: Leave business cards behind with your customer to hand out to their friends or family who might be looking for a business like yours.
4. Give Out Referral Cards
A newer concept that we have been testing with our customers is referral cards. The concept of a referral card is a physical card that your customer can hand out to their friends and family that offers some sort of coupon. Maybe its 10% off or maybe its $10 off, but everyone loves to help out their friends with discounts.
Create business cards on VistaPrint
Print some sort of coupon or offer on the card
Ask your customers to hand them out
Pro Tip: Remember your customer acquisition cost. Be sure to make an offer that equates to less than your average cost to acquire a new customer. You do not want to pay more!
5. Start an Email Newsletter
Regular email newsletters are a great way to keep your name in front of your customer base, especially if you are in a business where your customers do not use you often! In your email newsletter offer some sort of free guidance or tips related to your industry. Remember to keep your emails short and simple, and try to bring value to your customers. Be sure to ask for customer referrals in your email.
Need Help Generating More Referrals?
We are customer acquisition specialists. We can help you implement these ideas and more that will grow your business! Book a call today…