Word-of-mouth marketing is the best or, rather, the most affordable method to grow your business. Gone are the days when people would simply trust what you say or write on your landing pages. In this day and age, people want to know the experience of other people by using your products and services.
Therefore, they must read Google reviews, not your website testimonials, to know how likely you can meet the expectations of your audience. This is why you should take advantage of referrals and recommendations.
A survey has revealed that referrals make up 60% of your business. When you have people to recommend your products and services to others, you can see rapid growth in your business. Referral programmes are highly effective if you are running an e-commerce store selling a variety of products. It can generate more leads and increase customer loyalty in one fell swoop.
How do referral programmes work?
Before you run a referral programme, you should know they work precisely. When you are targeting growth, it is easy to be lost in the numbers. You actually forget there are actual people with whom you sold your products or services and therefore fail to nourish the relationship with them.
After a certain period of time, you will find a sudden drop in your sales graph. Referral programmes mainly help to avoid these kinds of pitfalls. It focuses on building relationships with customers, in other words, the number of people actually behind the sales.
Not only will they recommend your products and services, but they will also repeat the purchase cycle. This is how you will keep getting new customers without losing the existing ones.
How to make the most of referral programmes
Here is how you should create an effective referral programme:
- Focus on the incentive programme
Hardly will there be anyone who would want to refer your products and services without any incentive. Some customers may do so without seeking anything in return, but this will not amount to much.
You will have to run an incentive programme to get the constant benefit from referrals. First off, you will have to analyse your data to see what your customers want from you. How your incentive programme will be largely depends on their expectations.
You will have to make them realise that the incentive programme will benefit them. You should look at the competitors’ moves and take inspiration from their referral programmes. Do some online research to get an idea of what it should look like.
- Emphasise customer loyalty
Pick those customers to refer your products and services who have been buying from you for a very long time. It will be much easier to create a loyalty programme with these customers. Bear in mind that your targeted users would like to know whether the people referring them to your products or services have ever tried yours, and if so, have they repeated the purchase?
At the time of creating a referral programme, you should target those customers who can actually convert the prospects into sales. Do not forget that they will do nothing without getting an incentive. You should provide them with discounts and special offers in exchange for them to participate.
- Choose the right time and customer
Having said that, you should choose a customer that has been trying your products or services for an extended period of time; it does not mean that long-term customers are complacent. They might be discontented with their recent purchase from you.
Your referral programme will not benefit your business at all if you do not choose the right customer at the right time. You should make referral-centric calls to find the best customer for your referral programme.
Make sure you send the referral requests to only old customers. Instead of calling one by one, you should run a pop-up on your website to get input from your visitors if they are interested in signing up for a referral programme.
You can even directly email your long-term customers randomly to know their stance.
Social media is another way to make people know about your referral programmes. Rather than reaching out to specific customers one by one, you can simply post a message about your referral programme and let everyone know about it.
A word of caution
Most of the entrepreneurs fail to run referral programmes as they do not realise what their customers want. You must now what your customers expect of you. Your referral programme will only work when you offer them what they want.
Knowing the needs of your customers is the foundation for conducting your referral programmes successfully. You will have to dive into the journey they had with you.
Running such programmes consistently can be expensive. You might need to rely on unsecured business loans from a direct lender to cover the cost.
At the time of taking out these loans, carefully analyse your repaying capacity. Do research to get the most competitive interest rates. If you are unable to find the lender, you can take help of business finance brokers in the UK. They will introduce you to a lender that matches your requirements.
The bottom line
Regardless of the size of your business, it is imperative to conduct a referral programme to generate more leads. One of the most significant advantages of them is that you can attract a lot of customers without shelling out too much money on marketing.
A successful customer referral programme requires a strong strategy. You must know what your customers are expecting and what they care about. Choose the right incentive programme for your business.
Do proper research while choosing a customer for your referral programme, and carefully think of the incentives you will offer for referring your products and services. You can achieve long-term success by utilising the right referral strategy.
Gary Weaver is a Senior Content Writer with having an experience of more than 8 years. He has the expertise in covering various aspects of business market in the UK, especially of the lending firms. As being the senior member, he contributes a lot while working at TheBusinessFunds, a reputed business loan broker.
Gary performs the major role of guiding loan aspirants according to their financing needs and also to write research based blogs for the company’s website. Previously, he has worked with many reputed business firms and therefore, he knows every nook and cranny of business financing market of the country. Gary is a post-graduate with having a degree of Masters in English language. He has also done post-graduate diploma in Business and Finance.