Referrals - 5 Steps to Faster Revenue Generation

Published by: Rebekah Moon | Published on: 24 May, 2019
Referrals - 5 Steps to Faster Revenue Generation

Are you generating the amount of highly qualified sales leads you desire?  Would you like to experience a surge of new customers who already have a favorable opinion of you?  Regardless of industry, company size or composition (retail or e-commerce), referrals are gold when it comes to customer acquisition.
 
There is numerous research on why having a referral program in place is a "must".  In fact, according to the NY Times, 65% of new business comes from referrals.
 
That’s right. More than half.
So, why is it that most organizations don’t have a formal referral program?  As strange as it sounds, most business owners expect referrals will just “happen”.  A study conducted by Texas Tech University found that 83% of customers say they're willing to provide referrals after a positive brand experience, yet only 29% actually do.  Why the disconnect?  67% of businesses do not prioritize or initiate an intentional referral marketing program.
 
Why Smart Companies Prioritize Referral Marketing
 

  • People are 4X more likely to buy when referred by a friend
  • 92% of consumers trust referrals from people they know
  • One word-of-mouth referral dives 5X more sales than one paid on-line advertisement
  • 65% of consumers stated receiving rewards impacts their frequency of purchase
 
 
5 Tips to Start Generating Referrals

1.  Have a Target – Know What Your Aiming For 
You must be able to measure your progress. State exactly what you’d like to accomplish with your program – say, “motivate 50 current customers to refer friends to purchase thereby, generating 35 new customer over the next 6 weeks”. This way you have a clear picture of what you’re trying to accomplish and can determine if your plan is really achieving the results you’re after.

2.  It’s All About Timing 
Your ideal “brand ambassador” is very familiar with your product or service.  Review your customer lists and identify those who have:
  • Been loyal for the longest period of time
  • Generate higher than average revenue
  • Early adopters of any new products or services you offer
  • Purchase more frequently than average
 
Asking for a referral during your first interaction with a customer probably won’t net you the results you’re looking for. Reaching out to your customer base at the right time – when they’ve had a good experience with you or recently made a purchase are good times.  The key - develop a relationship first, and the rest will fall into place.
 
3.  What’s in it for Them – Make it Worthwhile 
 
For customer to sing praises about you, make it worth their while to do so. Offer incentives your advocates will enjoy and, more importantly, show them that they are valued. Many customers might be motivated more by altruistic reasons than self-interested ones, so keep that in mind. The more your customers feel appreciated, the more likely they’ll be to spread the word about your brand to their own networks. 
 
4.  Put Your Program on Center Stage
 If happy customers don’t know about your referral program, then how can they take advantage of it?
 
Too many businesses have referral programs in place, but they’re so hidden on the website that customers don’t know about it. To effectively promote a referral program, strategically place it on your Home, Contact Us and if you have an e-commerce site the Checkout page. So, when a customer visits your website, they’ll see the program front and center in all key locations.

5.  Nothing is More Powerful Than “Thank You”
Finally, don’t forget to thank your “ambassadors” after every successful referral. It could be as simple as an email, or as elaborate as sending a gift – the key – don’t cut corners in this step, be deliberate. It must communicate a genuine message that you appreciate their support and value them. This will, in turn, further nurture those important relationships and encourage future referrals.
 
Get Started – Now
 
An intentionally developed referral program will make your business more profitable, but it’s only as good as the work you put into it. Try implementing these 5 simple tips, it’s the first step to developing “raving fans” who will bring other revenue generating advocates for your brand.

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Walter Petticrew is an Adjunct Professor at University Mary Hardin-Baylor. Mr. Petticrew assists organizations to navigate change, overcome a crisis and achieve business growth by implementing proven principles that bring about instantaneous change and revenue traction. 
 
In October 1977, Walt made a goal, to retire in a small college town and become an adjunct professor.  Living the dream.