How Referral Marketing can help you grow your business

Why is referral marketing so important?

• It is relevant: When a friend or contact shares a business with you, they’re doing so because they know you and know you’ll appreciate being introduced to the business.
• It uses trust: They will also only share businesses that they trust. People won’t risk their reputation by sharing an unreliable or poor-quality business.
• People are wired to understand referrals: If you experienced great customer service, received a product that changed your life or maybe even your accountant saved you a lot in tax, you’d tell your friends about it wouldn’t you? We naturally share our experiences with our friends. It’s part of our conversations.
• It doesn’t cost you much, if anything: It’s pretty much free to acquire referrals and they tend to be warmer leads, as you’ve already developed rapport by having their contact as a client.

Whilst this is true, the sad truth is: whilst 83% of your satisfied customers are willing to refer products and services, only 29% actually do. We lead busy lives and often it slips our minds.

This is where a referral marketing programme comes in.

How to create a referral marketing programme

1. Set your goals

Set out what you hope to achieve from this referral marketing programme e.g. business growth, more clients, building trust with a wider audience, gaining referrals from 10% of your client base

Define these goals in detail and then define where you are now and the results you are getting: Have you already been asking for referrals? Who has been doing it? How successful have they been? What is the conversion rate of referrals?

This will help you identify what you need to do to reach your referral goals.

2. List your potential referrers 

List clients, customers, other business contacts / professionals or industry leaders who you know you have done good business with and are exceptionally happy with your service, product or business relationship.

Get your team to do the same and compile a list of potential referral sources.

3. Plan how you are going to ask for referrals 

Now you have a list of potential referrers, you need to plan how you are going to contact them. This isn’t a job you can automate. It’s important when reaching out to each contact that you consider the relationship and make it personal. You also need to consider the timing, and this will largely depend upon your product or service.

For some businesses, asking for the referral needs to come late in the relationship, for others it will be upon sale of the service or product.

4. Identify your incentives

The incentives will completely depend upon your business. You could offer those who refer and when someone buys from that referral:

• A credit or fee
• A discount
• A gift
• An arrangement where you simply just refer each other’s businesses (but be sure to track that they’re pulling their weight!)

You could also put together resources that they have access to if they act as a referrer, for example, access to free events or ability to share content with your audience. This not only gives them access to a wider audience, but also adds value to your clients by offering them other knowledge and advice that will benefit then.

To take it a step further you could create a programme where the more referrals the referrer provides, the higher the incentive.

5. Track! 

Regardless of your business or your incentives, you need to set up tracking to ensure you have the following information:

• Who was referred and who referred them
• When they were referred
• Whether they converted

You can keep it simple and just create a spreadsheet or if you use a Customer Relationship Management (CRM) to track your customer relationships, this would be a good place to track it.

This will allow you to provide the incentives and track who your top referrers are.

6. Shout about your referral programme

Once you’ve created the referral marketing programme, shout about it! You could do this via:

• Adding a little section on your newsletters
• Blogs
• Email signatures
• Social media

With your list of potential referrers, send them each a personalised email. We’ve put together a few template emails you can send, download them using the form below.