There is power in referrals.
If you aren’t creating incentives for satisfied customers to help you, you are missing out on a significant opportunity. Erin Condren markets artistic day planners that sell online at Erin Condren Planners. She realized the power of referrals after a few years in business. Today, with sales exceeding $40 million dollars, she can credit 24% of those sales to referrals. Erin rewards both the referred and the referral. Her incentives are simple, easy to use and achieve the goal.
That is $10 million dollars from referrals every year!
What motivates Customers to be Referrals?
- Customers Want to be Influencers. They like getting social credit for finding the next cool thing or helping friends solve problems. People like feeling like insiders with the special scoop. Make your programs two-way helping both the referrer and the referral.
- It isn’t The Size That Matters. Don’t get lost in trying to put too big a fish in front of folks. It isn’t the size of the incentive that often makes a difference. I recently read an article in INC about a company called Trunkster who took their referral down from $30 to $20 without any change in activity to the enterprise. Key is simplicity. Make it as easy as a click, a simple one-box form or some other ridiculously easy method to connect your friend or associate with the product.
- Reward sales, not inquiries. You can waste a lot of time with programs where you get lots of leads that go nowhere. Make sure the emphasis is in the right place. Don’t be afraid to put limits on the dollar value of the referrals. Condren learned the hard way, and some customers ended up with thousands of dollars of incentives, beyond what she planned.
Incentives work differently in B2B settings. If you are a manufacturer who sells to distributors, wholesalers, retailers and other levels in a value chain, you need to make sure the referral incentives make sense for them. Of course, customers don’t want to refer you to their competitors, but when a good customer leaves, how can you make sure they can still be helpful to you after they go to work somewhere else? If you don’t ask for referrals, you won’t get many.
Get your sales and marketing team together for a brainstorm on leveraging referrals. Social media platforms can be effective ways to get customers sharing your story with their friends. And, according to Nielsen’s 2015 Global Trust in Advertising Study, 83% of all consumers take some action when referred to by a friend. They may not buy, but they may check out the product or service. If you sell in a B2B world this is also a highly effective tactic to use.
How are you leveraging the power of your networks and customers to generate new business?
Want to learn about my referral program? Do you know someone who might be interested in hiring a marketing consultant? Call or text at 919 720 0995 or email me at jeffreylynnslater@gmail.com
Photo Credit: https://www.flickr.com/photos/puresugar/with/12289125656/ – Carol
