Referral Marketing: How to Get Sales Referrals from Your Existing Customers
Ezra Cabrera | June 1, 2022
Did you know that 92% of consumers trust referrals from people they know? This shows that referral marketing is an effective way of attracting and keeping potential customers.
But unlike traditional word-of-mouth, referral marketing involves strategies that the business implements to convert leads into loyal customers, usually by giving rewards and discounts to customers who promote their brand.
What is Referral Marketing?
Referral marketing is a way of promoting a business to new customers through referrals from the network of existing customers. Marketers offer incentives to customers to encourage them to spread the word about a product or service.
What are the benefits of referral marketing?
- Gain high-value, loyal customers
- Easier to measure customer satisfaction
- Extend your market reach
- Increase brand awareness
- Identify loyal customers
- Increase customer engagement
How to Ask for Sales Referrals?
Before you start attracting new referrals, be sure to work on improving your brand reputation. If your customers love your product and services, they are more likely to tell their family and friends about it and encourage them to buy from you.
Once you’ve established a positive brand reputation, here’s how you can ask for referrals:
Create a referral profile
Your referral profile is your ideal customer profile or your target audience. Figure out their industry, demographics, and concerns. Having a solid referral profile makes it easier to identify where you should focus your efforts.
Use a referral email template
Don’t forget to ask for recommendations. For instance, you can ask questions like:
- Is there anyone else that would benefit from our products/services?
- Do you know a friend who could use our service?
- Do you have a friend who would also like our product?
It helps to have a referral script, but make sure to personalize the conversation.
Choose the best time to recommend
The best time to ask for referrals is when your client is the happiest – when they’re satisfied with their purchase or after addressing their concerns. You can also ask for referrals from customers who willingly left a positive review about your business.
But remember, you can't be too persistent. Ask for recommendations without giving the impression that they have to do it.
When is it not the right time?
If your client is new, give them a chance to know your product better and understand its benefits before asking for feedback and referrals.
8 Ways to Attract Customer Referrals
Even if you have chosen the right time to attract new leads through existing ones, it is also advisable to use some amplification.
#1. Create special offers and discounts as a part of your referral selling program,
Encourage additional options or free periods of using the product or discounts.
For example, the online baby and parenting shop, Pupsik, encourages repeat business through a point-based referral program. Pupsik customers earn 250 points when a friend makes their first purchase.
Yesware, a company that develops and distributes sales and communications software, is another example of successful referral marketing use.
All you need to do is enter your friend's email address and send an auto-filled message. In return, you will be awarded bonus points. 6,000 points can be redeemed for a branded T-shirt and 12,000 for an Amazon gift card.
#2. Make sure your business is getting positive reviews Check out review sites like G2.
Remember, the clients must have an intrinsic motivation to recommend your business. To do this, think about when they are happy to share their experience? Why would they do it?
For example, if your customers are satisfied with your products and services, they may willingly recommend you to their family and friends.
Make sure the referral benefits both parties
Aside from offering referral bonuses, you might also want to offer discounts or freebies to new customers. When talking to your customers, be sure to mention the following:
- Let them know the benefits of recommending your products/services.
- The referred customers would also receive gift cards, discounts, or bonuses.
For example, Evernote offers a free monthly premium subscription for new customers, while those who bring in new leads earn bonus points.
#3. Use LinkedIn
This social network has long been an ideal tool for meeting potential customers. And as a small business owner, you’re most likely using it yourself. But before you request referrals, be sure to update your profile and optimize it. People should be able to tell what your business is about when they visit your profile.
Here’s an example of a simple template when reaching out to your customers.
#4. Create shareable content
Why is it essential to create content that customers want to share? This is an additional way to attract new leads through current clients. If you write what is truly valuable to your audience, they will want to repost it.
What kind of content should you create? Articles, ebooks, webinars, Q&A sessions, and so on.
For example, organize seminars and webinars as a team and share news about the event in your blog and on social networks.
Use a successful social media marketing method to invite your followers, some of whom are likely your customers, to tag a friend in exchange for a small reward.
Where can you share content? On Facebook, LinkedIn, Instagram, or Twitter. The Telegram channel can also be helpful, as well as uploading YouTube videos.
When people share your content, you’ll get new leads.
Additionally, it is better to make mailings with a link and recommendation to this content. You can do this with a tool from Snov.io – Email Drip Campaigns.
Сreate several variants of templates in a matter of minutes, and then proceed to launch the emails!
#5. - Add a "Recommend a Friend" feature to your website
Adding a referral button on your website makes it easier for your customers to refer to your business. This button usually goes with a short call-to-action leading your customers to your referral landing page or a pop-up.
The referral button could say:
- “Refer a friend”
- “Recommend a friend”
- “$15 for you and $15 for your friends”
- “Get 10% off for every new customer you send our way”
#6. Show positive reviews from your customers on the website
There are many benefits of displaying customer testimonials on your website.
First, it motivates and recognizes clients who have written their opinions and makes them feel more valuable.
Second, it encourages other clients to do the same, serving as a suitable method of attracting new leads through existing ones.
#7. Don't forget to say thank you!
Send your clients an email to thank them for the referral. If you manage to close the desired number of new leads, give them a discount or send a pleasant surprise. If they know their efforts have been appreciated, they are more likely to refer back to you.
Referral Marketing: Performance Control
The result of any program must be measurable and therefore expressed in numbers. Let's highlight the main metrics:
- The number of user recommendations. Counting the actions taken on your page when distributing a link is not difficult. The percentage of participants from the total number of visitors shows how engaging your referral offer to the audience is.
- Virality (how many clients are referred to one recommendation). This is a standard tracking for transitions with a parameter or UTM tag. It can be tracked in any analytics system. At the start, the coefficient must be greater than 1.
- Conversion of referred visitors to purchases. A good result is 20%. That is if a fifth of the clients referred took advantage of the offer and made a purchase.
Be sure to track the quality of your customer service after the launch. Clients are more likely to recommend your products if they like what you sell, how you do it, and where.
Wrapping Up
Referral programs are the most effective because consumers trust the people they know. A successful referral program can turn leads into loyal customers. Be sure to keep these tips in mind if you’re planning on creating a referral campaign for your business.
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