Make Referral Marketing Work For You
May 6th, 2010

It goes without saying that growing a small business requires a lot of hard work. One's driven attitude and relentless persistence is often what will help a person become successful competing in today's marketplace. The Synergy Marketing Consultants Blog has often discussed the many ways in which business owners can market and promote their businesses. And of course, we always recommend being as cost effective as possible throughout the processes of doing so.

We have touched on the concept of word-of-mouth promotion before, singing the praises of this very inexpensive and effective marketing strategy. So, without a doubt, the more people who refer your business to others, the more business you are bound to get. Darrell Zahorsky of About.com writes about the different benefits that can be provided to a business through “referral marketing”.

He writes that “finding the best qualified leads from your business does not come from a cold contact situation but from building a strong referral business.” Noting that referral marketing helps to reduce expenses, he also acknowledges that this strategy is known for building a large base of satisfied customers.

One of the main benefits of increasing your number of happy and loyal customers is that they become part of the referral process, advising others to become your customers as well. There really is no better way to increase business than to have others promote it for you at virtually no cost. Essentially, if you make your customers happy, they will return the favour tenfold.

Zahorsky believes, however, that although referral business has provided so many companies with great success, there are so many more companies who do not properly utilize this tactic. As a result, their overall profits are not substantial. As a result, Zahorsky lists his “7 Sure-Fire Ways to Build Your Referral Business” to assist owners in increasing their luck with this type of promotional strategy.

Firstly, he advises that you set a target that includes a timeline for exactly how much you want your business to increase. Secondly, he recommends that entrepreneurs be aware of appropriate timing. Although it may feel natural to ask a customer for a referral immediately after a sale, you may want to give your clients time to experience your service or product first. Allow them to be genuinely delighted before requesting a kind referral.

Number three, according to Zahorsky, is to focus on your “Top 20”. By this, he means to for owners to keep in mind that not all customers are good referral candidates. Instead, you should select your top 20% most “ecstatic” customers to ask for referrals, helping you to build a significantly strong network of clients.

“Give and You'll Receive,” says Zahorsky. If you give your clients that little bit extra, they will remember it. Your extra service will be more encouraging of follow-up support. Don't forget to remind them of the type of customer you are looking for when they are referring your company, as well.

Finally, a rewards program is always a good method of thanking your customers. Zahorsky gives the example of providing customers with special discounts or prizes when they refer at least five new customers. The “thank you” of course, that can be provided through formal letters to your customers, rounds out Zahorsky's list of guaranteed ways to make referral marketing work for you.