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Reaping the Rewards of Referrals: How A Simple Referral Program Can Increase Your Customer Base
Stephen Altrogge, Author
As a home service business, one of the most critical aspects of continued success is acquiring new customers. But even with a professional, well-trained team, top-notch customer care and expertise that rivals any of your competitors, generating new business is challenging.
Of course, advertising can get costly, and much of the ROI from your ad dollars is less than stellar. There is however a marketing approach that will plug you into an untapped customer base while also making the most of your marketing time and money.
We are talking about referral marketing.
Referral marketing is the promotion of your company through word of mouth, typically from existing customers. No major ad buys, no direct emailing or mass mailers, no major marketing team - just the influence from others who’ve used your service and liked what they received.
Certainly, this marketing approach makes sense. Think about all the recommendations you get from friends, family, and even just acquaintances for all manner of things. Restaurants, movies, tv shows, trips and hotels and things to do.
And yes, home services.
While the concept is relatively simple, plenty of businesses ignore this fundamental aspect of customer growth.
For most, it’s the misconception that referral marketing takes a lot of time and effort, which is untrue.
Sure, it’s slightly more involved than merely purchasing advertising space and AdWords, but only slightly. The critical difference is that static advertising is, well, static. Not to mention the returns could take weeks or even months before gaining any benefit.
With referral marketing, you are actively engaging with current customers to help generate new business.
The payoff can be both immediate and immense.
Before touching on a few key strategies to get your referral marketing off the ground, it's important to understand why it's so effective. It comes down to two basic tenets and a straightforward equation: excellent service plus trust equals referrals.
You provide a customer with a high-quality and valuable service.
Your work generates trust with that customer.
Since they trust what you’ve provided to them, they, in turn, recommend your services to people that trust and know them.
This is the number one catalyst for all customer referrals and falls squarely within the control of the business - your business.
For any referral program to be successful, you first must provide quality services. It may seem obvious, but to truly generate a reliable stream of referral business you have to give your current customer base a reason to refer you.
Even if your services are the least expensive in your area of expertise or come with extras and add-ons, few consumers will recommend you if the actual product is subpar.
This means being responsive to their needs, consistent with your services, and engaging in your interactions.
If you are in the early stages of developing your business, devote plenty of resources to ensuring quality, accuracy, and professionalism.
If you’re already at that high-quality level, do everything you can to maintain it, and find new ways to enhance the client experience. Don’t be afraid to tout the many satisfied customers you have.
If you’ve experienced tough times and your business’ satisfaction ratings are less than stellar, don’t get discouraged. Focus on core values and the basics of your business, and you can reverse past negative experiences. Redemptive referrals are quite powerful in their own right.
Regardless of where you find yourself in the evolution of your business, a focus on quality is the foundation of a strong referral network.
If excellent service is what puts a referral in motion, then trust is ultimately what compels the customer - more specifically, the satisfied customer - to spread the word about your company.
If it seems that confidence is hard to come by these days, it’s because it is. When a consumer finds a brand or service they believe in, they tend to hold tight to their loyalty.
The benefit for an organization is that consumers often want to share their great find with others. According to a 2015 report from Nielsen, this peer to peer to recommendation far outweighs other forms of advertising.
So with that evidence in hand, how then does your business take advantage of a happy client base ready to spread the word?
There are many ways to build a referral marketing program, but the most direct and effective manner is through engagement.
Your established client base provides you with a built-in advertising platform. As you provided the service they loved and instilled the trust they were wanting, all that is left for you to do is engage them in sharing it with others.
Here are three critical strategies for engaging them directly (and one that goes beyond your current clients) and raising your referral marketing to the next level.
If yours is like most businesses, when you first started, building your initial customer base was challenging. As you grow, these early fans turn into your legacy customers - you are on their list of go-tos whenever the need arises.
So why not incentive and reward them for helping bring in like-minded people?
Whether it's through service discounts, loyalty rewards, or similar promotions, tee up your early adopters with specials designed with them in mind. The “look what I got” crowd will no doubt tell everyone what they got.
Then reward them again with referral incentives that further thanks them for their commitment.
Of course, your referral incentives should be open to all customers that bring you new business and tiered offerings will help appeal to those that have a knack for drumming up those new clients.
But don’t hesitate to spotlight your long term patrons. They are after all some of your biggest influencers, so make sure they stay that way.
The power of social networking is undeniable. Just as you use Facebook as an individual to keep in touch with those important to you, leverage it for your business as well.
Not only does social media widen your firm’s reach, but also helps you create a narrative about who your company is, what it can do, and how it can help new consumers. Perhaps most importantly, social media platforms promote sharing, i.e., referrals.
To capitalize on these efforts, set up your website to promote easy sharing with social media buttons and special incentives or rewards and encourage others to find you online.
Make sure also to employ current customers to build up your online presence. Don’t be afraid to ask current clients for reviews and recommendations and to put their kudos on your Facebook page and your website.
Referrals from current clients will undoubtedly prove a top source, but that doesn’t mean it's the only one.
As an active part of the community that your company calls home (or has an operational presence in) you will put your brand and services in front of potential consumers you may not have otherwise touched.
Non-profits, churches, community festivals or related volunteer or sponsorship opportunities offer countless promotional opportunities that can drive your referral business.
We should mention that with several of these outreaches, some costs may be involved. The buy-in (or time or resources) however is typically very low and is more than worth the large number of people you’ll connect with. And, of course, those individuals know other individuals, thereby organically growing your referral base beyond the initial investment.
Although it may sound like a method to achieve a bump in new clientele, referral marketing is much more than a temporary effort.
Incorporating referrals as a key part of your marketing and advertising efforts are vital to maximizing all potential new client sources.
Even as other advertising sources ebb and flow, a referral program provides you with a consistently low cost, high-value marketing channel that never turns off. Each new client is a new referral opportunity.
Now that doesn’t mean it can be left alone to manage itself - far from it. But with regular reviews of the data points your efforts create and minor tweaks as necessary, your referral program will far outlive any advertising campaigns.
Consumers are always looking for companies in which they can believe. Whether it's a product or service, they almost always find those brands through recommendations from peers they trust. Taking advantage of this mindset should be a core focus of your marketing efforts.
Remember, create a positive customer experience, then engage those happy clients in promoting the benefits to others. Doing so will ensure your success on two fronts - a satisfied client base already full of praise and a new set of clients ready to sing the same tune.
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