Referral marketing has been one of the most underrated strategies that can accelerate sales much faster than any other promotional activity. It is one of those rare techniques that does not require a huge budget but often has a very high success rate.
Despite the low costs, it is extremely effective in accelerating revenue growth and generating quality leads that are highly profitable in the long run. According to recent studies, the retention rate of customers acquired through referrals is 37% higher than the rest. No wonder over 78% of marketers count on referral marketing more than any other form of marketing.
It works extremely well because many consumers are more comfortable buying a product or service referred by someone they know and trust. So, when it is working for so many businesses, it is bound to work for you. If you are now worried about getting started with referral marketing and rev up your sales, then read on. Below mentioned are some of the most powerful business strategies to increase referrals.
1. Create an amazing customer journey
From the very moment a customer interacts with your brand, their customer journey begins. Then on, every little thing you do creates an impression in the minds of your customers. You need to get this right before asking your customers for referrals, so check your customer satisfaction levels.
To deliver a superior customer experience, you must plan the customer’s journey well in advance. You can create buyer personas, which refers to fictitious persons created based on the various buyer segments. It would be best to map out a customer journey for each persona based on their trouble areas.
When you address specific issues for the various buyer segments, it reassures the buyer that you care about them. Once your customers are in that zone, you are in a much better position to ask for referrals and reviews. A recent survey confirms that 86% of buyers don’t mind paying more to a seller delivering a superior experience. So, you can be sure that a good number of your customers would be willing to advocate your services in exchange for superior customer service.
Tips for doing it the right way
- Classify your leads based on common demographics.
- Proffer laser-focused buyer personas.
- Strategize a customer journey for each persona.
- Identify roadblocks and plan solutions well in advance.
2. Provide Outstanding Customer Support
Back in the day, businesses compete based on pricing, but that no longer works. You are now dealing with Gen X and Millennials — two generations with an entirely different buying approach. They don’t care too much about a slight price advantage but rather make their buying decisions based on the support they receive after making the purchase.
Therefore, businesses are no longer competing on the price factor but on delivering superior customer support. If your business does not invest in providing excellent support, then it is time to raise the bar. A strong team that can deliver prompt and timely support is key to getting referrals.
Below mentioned are some useful tips to improve your customer support:
Pick the right tools
Usually, the number of customer support requests received is highly disproportionate to the size of the support team. Therefore, business leaders must focus on making their support teams more efficient and productive, which is easier said than done. You can start by helping them do what they are supposed to by equipping them with the right tools.
Minimize the number of applications
On average, businesses use around 137 applications, and that’s time-consuming because one needs to log into multiple dashboards. In a support team setting, imagine the plight of an employee who must juggle between several applications to receive and process requests. By equipping your support team with the right tools to manage customer requests, it is possible to minimize the number of applications used to deliver customer support.
Many AI-based customer request management tools currently facilitate everything from request assignment to omnichannel support from a single dashboard. You can even automate ticket assignments based on predefined conditions and reassign them. Most importantly, you can collect customer feedback and shoot automated requests for referrals based on their satisfaction level.
Personalized Communications
What sounds better? A message starting with ‘Dear User…’ or ‘Hi Nancy…’. Everyone likes to be addressed by their name, and it does not end there. Personalization of emails, live chat, and product recommendations can have a deep impact on customer relationships.
3. Reviews Matter the most.
When your customers have had an awesome experience and are lauding your support and service, request them to share their experience on social media and other review sites. Some businesses offer discount coupons to those who do, and you could do the same. Online reviews are extremely powerful in driving sales, and they influence an astonishing 93% of buyers.
Besides sales, online reviews also improve search engine rankings by conveying your credibility to the search algorithm. All of this lays the foundation for your firm to do direct business outside e-marketplaces like Amazon and eBay, which take a piece of the pie.
Businesses that realize this go that extra mile to wipe off bad reviews by offering quick resolution to customers. You can do the same by offering free shipping, replacement, or some other freebie to make up for the inconvenience caused. In exchange, request them to update their reviews. When this happens, some customers are so thrilled that they won’t mind providing referrals by openly mentioning your business on their social media.
4. Provide Social Proof
Referral marketing is all about trust, and unless you come across as a credible business, converting referrals will not be easy. This is where providing social proof can solve many problems and demonstrate your authority.
There are many types of social proofs that you can provide based on the type of product or service you offer. For example, you could provide ratings, reviews, photographs, testimonials, celebrity endorsements, and so on. Not sure how to implement it on your website? No worries! Nowadays, many applications are available, and a simple plugin installed on your website can do the job.
5. Make it a point to ask.
You get what you ask for, so don’t shy away from reminding your customers to refer to their family and friends who might need your products or services. You can encourage them by offering freebies and discounts on future products and services.
For example, a SaaS product seller can offer free access to advanced features in exchange for referrals, and a flight booking app can offer future discounts. These little gestures can go a long way in accelerating revenue growth, reducing churn rate, and generating repeat business through referrals.
6. Incentivize Referrals
You can also incentivize referrals by providing customers a gift hamper when their referrals convert. This could be a shopping coupon, a memento, or upfront cash. Some businesses allocate a marketing budget to reward those giving referrals with some token of appreciation as soon as a referral is made. That’s indeed the right way of doing things, but it only works for high-ticket products or services with a generous ad budget.
Although incentivizing referrals brings along many benefits, it is often perceived as a complex process that is hard to implement in the digital space. That is probably due to the technicalities involved, such as link tracking, coupon code tracking, etc. Even though it may seem a tad bit difficult at first, there’s nothing to fret about. There are several reliable rewards and referral management software programs available on the market. These applications come with multiple features that make it easier to deploy both incentivized and non-incentivized referral marketing strategies.
7. Giveaways
One of the most popular referral marketing techniques used to generate leads and get some free publicity is organizing giveaways. Large businesses can do this independently through gamification or surveys on their websites, while the smaller ones can do it by reaching out to social media influencers. Many would gladly promote a product in exchange for a free sample.
Some businesses have done extremely well by leveraging the social network of their friends and acquaintances. For instance, the Founders of Hawkers, a Spain-based sunglasses company, made a fortune by giving away sunglasses to the Founders’ friends. Their simple hack was to give away sunglasses to those who have a large friend base on social media platforms but in exchange for their sunglasses being featured in pictures and videos.
8. Don’t Miss Security:
Besides marketing, it is necessary to provide web security to your customers. In today’s world, most companies are offering products and services over the web. In this scenario, customers’ sensitive information like login credentials, financial details are important and should be secured with proper security protocol. SSL certificate can be handy and useful security for the website. Once you install an SSL certificate, it starts to give security to the data that flows between the customer and the company’s server. You can buy SSL easily now as multiple options are in the market.
Final Takeaway
Referral marketing is the most appropriate form of promotion during economically challenging times when businesses are struggling to remain afloat. It does not require a lot of investment, nor does it reduce the profit margin. Instead, by applying the above mentioned referral marketing strategies, businesses can reduce customer acquisition costs and maximize revenues. Not to mention, it provides businesses with an avenue to reduce customer churn and increase retention.