10 Referral Marketing Tactics
Savvy independent business people understand the power of referral marketing. In fact, many independent businesses – such as financial services professionals, interior designers, caterers, or personal trainers – grow their business exclusively through referrals. In a recent study of financial advisors, 80% of advisors’ business came through referrals, and 70% of clients gave referrals on a regular basis.
Referrals are the best source of new prospects:
- They come pre-qualified – you typically have a good idea that they are a good potential customer because they are often just like the current customers who referred them.
- They come already pre-sold – their friend’s endorsement often means more than all the sales-speak in the world.
- They are typically in your region or geography.
- They cost almost nothing to produce and typically only require a fraction of the time to close as a cold lead.
- Referrals become a quality source for more referrals.
10 Referral Marketing Tactics
Listed below are tactics that businesses should use to increase referral business. Experiment with different tactics. The best strategy may be to employ several activities and discover the right mix for your individual practice.
1. Ask for them
Perhaps the simplest and most common form of referral marketing is simply asking your clients for them. Remind your clients that you grow your business through referrals and that you really appreciate when they refer business to you. Some businesses proudly state on their business cards that they are “100% referral based businesses”. This strong message accomplishes two purposes: 1) it reminds clients to give referrals, and 2) it boasts that their client base is made up entirely of very satisfied clients.
2. Business cards
Hand out business cards. Give your clients stacks of them in person and through the mail. Encourage them to give them out to potential customers.
3. Rewards and incentives
Giving rewards or thank you gifts for new referrals can be a powerful way to have existing clients boost their referral giving. You offer clients a valuable reward for taking the time to give you referrals, and you fulfill the reward when referrals turn into new clients. Rewards aren’t for all businesses, though.
4. Referral events (“bring a friend” invitations)
Referral events can include seminars, dinners, cocktail parties, picnics, sporting events, tours, and other group activities, where you ask your clients to bring a friend. These events are equally well-suited for generating repeat business as they are for finding referrals.
Many events, such as seminars, allow you to have a formal ‘pitch’ during the event. Other events focus on an enjoyable evening out at a restaurant or an interesting locale. These events allow you to market yourself while shedding a favorable impression on your guests.
Costs and efforts: Of all tactics, this may take the most time and resources. Events can cost $500 – 3,000 on average, and go much higher depending on what you do. Don’t forget about invitations, RSVP processing, signage, AV equipment and many other factors that may add up.
5. Mail campaigns and letters
Sending referral request letters with stacks of business cards is an easy and non-obtrusive way to ask for referrals. A personal note or letter can respectfully ask for referrals while creating a good reason to have a positive contact with an existing customer. The more personal you can make your letters, the less they will seem like promotional direct mail. Handwriting the envelope adds a personal touch and differentiates your letter from junk mail.
6. Phone campaigns and changing your call patterns
Calling clients directly and asking for referrals has many benefits: you have their immediate attention and there’s a good chance that they will not postpone giving you names (provided they have some). It can also be a positive outreach to clients to see how they are doing and potentially create new sales.
The downside to calling is that it is time-intensive and may bother some clients. The best strategy here is to begin including referral requests in your day-to-day contacts and phone regimen.
7. Business partner programs
Business partner programs typically involve two or three different, non-competitive businesses cooperating to ‘cross-seed’ each other’s client base. They often culminate in a joint event, like a seminar or evening out, where each business partner invites their clients to the event, and the other partner has a chance to meet or pitch to them.
An example would be a financial consultant and a luxury car dealer holding a joint event. The event is a 20-minute seminar on estate planning. It’s held at the auto dealer’s showroom. After the seminar, guests are invited to peruse this year’s new car models. Wine and cheese are served. Both businesses get to meet new affluent clients. Other example partnerings might be a CPA and a lawyer, or a wedding planner and a caterer.
8. Social events
Social events, such as church, community service, children’s sporting events, or school functions, can be a wonderful place to find referrals. They can be very immediate – since you are there you may meet the referred client(s) right then – and the introduction takes place in a positive, communal atmosphere.
9. Viral marketing and E-publications
“Viral marketing” is electronic marketing that relies on people passing along information to others (much like a virus is passed). This is typically done by creating information products, such as articles or e-newsletters that are available to your client base and others. They have a forwarding feature that allows people who enjoyed the article to send it to friends via e-mail. Those recipient friends can then forward the article on to others.
Viral marketing can be very powerful when done correctly. Forwarding e-mail or links is very easy for clients, and referrals will get a taste of your business by reading the article or e-newsletter. The difficult part is creating compelling content that is relevant to your business that is differentiated from glut of content already available on the Internet.
10. Online and e-mail programs
The Internet provides new opportunities to gain referrals. Businesses should have an easy-to-find webpage that has their contact information.
E-mail can be used to make non-obtrusive contacts to clients and make referral requests. The benefit of e-mail is that clients will already be at their computers and their e-mail program – the same place they keep their e-mail address books of everyone they communicate with. The client only needs a few clicks of the mouse to send you e-mail addresses of family and friends.
There are online services (like ReferralSoft) that allow you to send professionally formatted e-card referral requests and track referrals online. These services advance the homespun e-mail contact into a formal, trackable referral program.
Reprinted with permission from: ReferralSoft.
Call a Direct Marketing Specialist at 800.959.8365.