5 Ways To Get Better Results From Referral Marketing

in On Local Business Marketing

Picture the following two scenarios …

Scenario A

Would-be-customer Bob is driving to work when he hears your advertisement come on the radio. The pleasant voice-over you hired tells Bob about you and your business, your extensive product knowledge, your fabulous selection and your first-rate customer service. Bob needs what you sell. But Bob does nothing.

Scenario B

Would-be-customer Bob is talking to his friend over lunch one day. His friend tells Bob about you and your business, your extensive product knowledge, your fabulous selection and your first-rate customer service. Bob needs what you sell. Bob becomes your customer.

What’s the difference?

When your next would-be customer hears about you from someone they knows and trust, they’re more likely to take action than if they learn about you through your own promotions.

Why? Because referrals give you immense credibility.

In fact, ask any local business owner, and they’ll tell you most of their business comes from the referrals of happy customers. Referrals are the lifeblood of local businesses like your own.

Don’t worry, you’re going to learn the easiest ways to encourage referrals for your local business in a minute.

But first things first.

If you’re ever going to get the referrals you want, your local business must be one thing: remarkable.

As in, you have to give people a reason to talk about you. No one goes out of their way to refer friends and family to mediocre businesses.

If you don’t know what makes you remarkable, spend some time figuring it out. And if you realize it’s nothing, make something remarkable.

Businesses that aren’t remarkable will not survive.

Now 5 simple strategies to spread the word about your “remarkableness” and generate a steady stream of referrals in your local business.

  1. Make it EASY for customers to refer. This is especially important if your product or service isn’t easily explained. Be sure anyone excited to refer has a place to send their family and friends to learn more about you. See #4.
  2. Make heroes of customers who refer. People are largely recognition starved and will appreciate you when you give it to them. Give special treatment to people who refer by highlighting them in your newsletter or acknowledging a customer/client of the month. Anything that lets them (and others) know that referrals don’t go unnoticed.
  3. Incentivise referrals. Create special reward programs for customers who refer, and advertise it to your existing customers and clients. For example, an oral surgeon in my area gives patients who refer $50. To spread the word, he includes imitation 50-dollar bills in his new-patient and out-patient packets with a summary of the reward program on the back.
  4. Highlight customer testimonials on your website. Videos are best for this strategy, but written testimonials will work as well. Designate a place on your website where prospect will see video after video of local people talking about what they love about you and your business. It’s like having your best “referrer” working for you 24 hours a day, 7 days a week.
  5. Prove you care. Do you or your employees have downtime? Make personal, follow-up phone calls to your existing customers and clients. That extra touch goes a long way and makes your customers dramatically more likely to refer.

{ 3 comments… read them below or add one }

1 bradbowman February 24, 2010 at 5:00 am

I use this strategy for my business through a monthly newsletter I send to all my clients. I don't make it seem like an incentive but rather a reward for referrals. I am always on the lookout for new and more thought provoking ways to encourage them.


2 robate159 February 8, 2010 at 10:32 am

Small business
Small Business owners are largely forgotten. Thats why I only focus on them. I have experience several members of my family file bankruptcy due to small business failures. I also I suffered through 2 destroyed businesses due to failure however, in my failings I have learned some of the secrets to success. (Who can say they know it all?)
What I like about small business owners is that they are not afraid to take huge risks and lay it all on the line. But, I agree they do need a lot of help with their marketing. I think having them go the social media and email route is not only the least expensive but its also the most effective. Thanks for the stats!


3 James Deck November 2, 2009 at 2:46 pm

Great post, however I disagree with #3. Referral incentive programs “cheapen” referrals; the person being referred will always wonder if you genuinely like the product or if you want to collect your $50.

In my experience, people who are genuinely happy with your products or services will refer without any incentive. In fact, some people will shy away from referring where there is an incentive as they, or won't claim the incentive, on an ethical basis.

Having said that, you should definitely send a gift or thank you card to referees after the fact.


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