by Donovan Dillon Contributor
Posted on July 23, 2013 18:48 PM
Referral marketing is a valuable tool to help build your business, and there are many statistics to support this fact. According to The New York Times, 65 percent of all new business comes from a referral from another customer, and people are four times more likely to purchase from a company that is referred to them by a friend. However, in order to tap into referral marketing techniques, you must develop a plan of action.
Set Referral Goals
The first step in developing a referral marketing plan is to set goals for how many referrals you want to generate in a certain period. Determine how many referrals you currently receive and then set a goal to increase that number by a certain percentage. Don’t focus on the referrals that generate business, but rather on the total number of referrals you receive, as not all referrals will result in a new customer.
Once you have set your referral marketing goals, determine which people or businesses are more likely to generate referrals. Definitely target satisfied customers and those that have been customers for a long time. Put a system in place where you will automatically ask for referrals from current customers as well.
Design Your System
Once you have determined the target audience for your referral marketing, brainstorm business advertising ideas that may help increase the likelihood of referrals. Mailings with prepaid postage envelopes, emails with online response forms, or online forms from your website are great ways to encourage current customers to refer family and friends to your business. Offer incentives, such as discounts, gift certificates, or special services that will benefit the current customer as well.
Say Thank You
One of the most important parts of any referral marketing program is to thank the current customer who provided the referral. Make it a common practice as part of your marketing techniques to send handwritten thank you notes to loyal customers who recommend your products or services to their friends and family. Use a tracking system to remain organized and to be sure that the proper follow-up is completed for both the current and potential customer.
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