When the time comes for you to hire someone new in your personal life or business – from a hairdresser to an accountant – where is the first place you turn for recommendations? The answer is likely your friends, family, or other trusted businesses. This small act is the essence of referral marketing.
A referral is a trusted recommendation from an individual person. Referral marketing is the method of sharing products or services with others through these trusted recommendations – many of which are made by the ever-enduring practice of “word of mouth” or, you know, talking to other people.
A study from Nielsen showed that recommendations from others is still the most trusted form of advertising even with all of the new, creative ways of marketing our businesses through social media and the internet.
Personally, some of my best haircuts, vacations, and other purchases I’ve made have come from getting a recommendation from a close friend or family member. Likewise, some of the most incredible client relationships I have came through other clients recommending my business. It turns out, the amazing people I work with seem to also have the most amazing friends! (Go figure!)
So how do you go about using referral marketing in your own business?
Establishing a Referral Program
Yes, in a perfect world all of the marketing you would ever need would come from friends, family, and current customers recommending your business of their own free will. This would make acquiring new clients almost effortless.
And, when you’ve been in business long enough in the right market, this may happen a fair amount of the time, but the reality of continually growing your business through referrals means establishing a formal referral marketing program.
Now, this doesn’t have to be as big and scary as it may sound.
A referral marketing program is simply an organized way for your clients or customers to spread the word about your business and be rewarded for doing so.
To get started with referral marketing, ask yourself the following questions:
- What is the end goal of my referral program?
- What clients am I currently serving and what are their pain points?
- Should I offer incentives to my current clients as well as the new clients that sign with me or purchase from me as a result of the referral?
- What kinds of incentives would be exciting or meaningful to my clients or their business?
- How will I alert my current clients of the program? By email, social media, phone calls?
- How will I track referrals and incentives?
Referral Marketing Incentives
Once you’ve thought about the logistics of your referral marketing program, the biggest challenge most people have is brainstorming the types of incentives that will actually motivate clients to make recommendations.
Here’s a list of referral marketing incentives to get the ideas flowing:
- A percentage off of their next purchase or monthly retainer cost.
- A copy of your book or ebook.
- A complimentary strategy session with you.
- A free popular product from your shop.
- A gift card to another shop or brand that you love.
Keep in mind that some of the best referral marketing programs offer an incentive to not only the client giving the referral, but to the new client that is beginning to use your services.
Also, remember that cash incentives – while they seem easy and appealing to everyone – are actually 24% less effective according to a study out of the University of Chicago than non-cash incentives.
Referral Marketing for Heart-Centered Entrepreneurs
As I’ve shared in the past, here at Amazing OBM, we are here to help heart-centered entrepreneurs make a difference in the world through their businesses.
So, one last important point to keep in mind when establishing a referral marketing program is doing it in a way that is “on brand” or true to you and your business.
This can mean…
- Carefully selecting incentives that are both heartfelt and related to your mission or purpose.
- Choosing discerningly who you ask to participate in your referral program or making sure you only include clients, family members, or friends that you have stand-out relationships with.
- Not overburdening your contacts or be inauthentic in asking for referrals. As a business owner, you know how much is already on your plate, so be sure to not ask for more than you yourself would be willing to give in regard to time and effort spent.
As with all things business and marketing related, be genuine and lead from a heart-centered place.
If you need help establishing a marketing referral program for your business or need assistance with your marketing strategy in general, the team at Amazing OBM would love to connect! You can start by scheduling a FREE 30-minute consultation. We are happy to chat, offer you some valuable tips, and determine if we are a good fit for one another in future endeavors!
The Magic of Referral Marketing
May 13, 2020