What Is Referral Based Marketing and How To Do It Correctly
The best type of business promotion is word-of-mouth advertising. In other words, referral based marketing. It is the easiest to set into motion, it is completely free, and it has the highest conversion rates. Despite all this, it is also the least used form of advertising. One reason it is not used more often is because many businesses have not learned how to do it right. Referral based marketing is almost an art form, and if you can learn to become very good at it, your business will flourish.
4 Reasons to Use Referral Based Marketing
Referral based marketing makes sense for the following reasons:
* It reduces the cost of selling. There are no ads to pay for nor cold calls to make.
* It builds on customer satisfaction. Satisfied customers will refer you to others who can benefit from your services. Warm referrals make it easy to sign up new customers. The sign up rate for non-qualified leads is estimated to be about ten percent while qualified leads convert at a stunning sixty percent.
* It increases your overall volume of sales.
* It creates a perpetual lead cycle. More new customers means more people who can later refer your business.
5 Tips On How To Do Referral Based Marketing
Here are some suggestions on how to get very good at referral marketing:
1. Set a goal.
If you know where you are going, then it is easier to get there. Set a percentage goal with a deadline. For instance, “We will achieve a 15% increase in leads using referrals within the next 12 weeks.”
2. Do it at the right time.
The worst time to ask for a referral is the time most sales people ask—immediately after they have closed the sale. The best time is when the client has expressed satisfaction with your work through a positive comment. If the customer does not offer a testimonial, ask for one.
3. Take a systematic approach.
Here are 5 do’s and don’t that will improve your success with referrals:
(a) Do your best to make a good impression, providing excellent customer service and building rapport.
(b) Don’t be shy about asking for a referral.
(c) Don’t just get a name and number, ask to be introduced to the new lead. All a customer has to do is pick up a phone, introduce you, and then you can describe what you do in more detail.
(d) Do express gratitude to the people who give you a referral, including sending them a thank you card or email.
(e) Don’t forget that people with money will probably refer you to someone else who also has money. Usually, people associate with others within their socioeconomic group.
4. Practice generosity and reciprocity.
If someone gives you a referral, offer to do something for them in return. Give them a discount on their next job with you offer to provide an extra service free.
5. Polish up your elevator speech.
If you have a short, clear description of your business, it will make it easier for your customers to describe your business to others. Similarly, when you talk to your warm leads, you will be able to quickly clue them in on what you do.
These five tips will improve your skill at referral based marketing. Practice them often. Incidentally, now that you know how to sell better with little effort, why not consider adding more income streams to your business?
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