How To Grow Your Business With Referrals

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Customers hear about businesses in all sorts of ways, and with everyone wanting to stand out from the crowd these days, marketing tactics are becoming more elaborate. But when you look at marketing closely, there are generally two ways in which a customer will hear about your business.

The first is through getting yourself in front of potential customers – advertising, emails, social media and cold calling for example. The second is through word of mouth. People often ask friends for a referral and recommendations when they’re looking for a particular product or service. The big difference between these two methods is the conversion rate, with referrals producing a whopping 400 per cent increase in conversions! With statistics like that, you’d be crazy not to encourage your happy customers to talk about you. But how can you do it?

Ask your customers

When you have a happy customer, simply ask them to tell their friends about you. Also ask for a written testimonial you can use on your website, and provide ways they can write a positive review about you. Send them an email with a link to your preferred review system and ask them to leave a review. To get the best results, make it as easy as possible for them to leave a review, and ask nicely! Any online reviews and recommendations will contribute to your social proof, also known as ‘informational social influence’. It’s a psychological phenomenon that people will copy what others have done if it’s seen to produce a favourable result!

And if you need any more convincing, product reviews written by customers are 12 times more trusted than product descriptions from the manufacturers. Nearly 63 per cent of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews, so it’s well worth the effort to ask for some positive reviews!

Set up a referral program

Create a referral program that suits your business and reward your happy customers. It could be as simple as giving your customers a certain percentage off their next purchase when they refer a friend. I recently referred a few friends to a fabulous masseuse I’ve been seeing and was delighted to receive a thanks letter with voucher for $20 off my next massage. Any kind of incentive is a great way to promote referrals. Though, in my experience, a simple thank-you could be all people want in exchange for recommending you (as long as you do a good job). And if you do offer rewards, to make it fair, you can also encourage the referred person to buy from you with a special introductory offer.

Network with complementary businesses

Looking for complementary businesses that have a similar client base to yours is a clever tactic. You can refer business to each other and create strategic alliances. The best way to get referrals is to give referrals. People who go to the effort of connecting with others for business opportunities are the ones who are referred to the most often. Give and you shall receive!

This is also a good way of ensuring your shared clients get the best possible service as you all do a better job once everyone knows everyone (more accountability). Growing your business by encouraging referrals and recommendations is low cost (often free!), connects you with your ideal customer, gives you exceptional conversion rates and more loyal customers. So get referring!

Julia Palmer is the Chief Executive of the Business Networking Academy, empowering people to create and manage more sustainable and viable networks through learning effective business networking skills.

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