Referral marketing: an opportunity to promote your business

Referral marketing, particularly customer referrals, is a powerful marketing tool. Research tells us that a customer who has enjoyed great service will tell up to 12 people and that they will tell up to 12 more, so this can have a considerable knock-on effect on your business. However, people are more likely to talk about your business when they have been unhappy with your service!

If you want to build your referrals, you must cultivate your sources, and not rely on good service alone. It is far easier to convert referred leads than those you've targeted from cold, and referred customers are more likely to make onward referrals in turn. Here are some ways this can be done:

• Instead of waiting for your customers to put a good word in for you, be proactive and work with your team to develop a referral marketing strategy.
• If you never ask your clients for referrals, chances are you will never get them. Make it a point to ask satisfied customers whether they could suggest to you some potential contacts who would value your product or service.
• Consider offering promotions or services in exchange for contact information. For instance, you might offer a free bottle of wine for six referrals. Better still, offer a free product that has your company's logo on it.
• Allow visitors to your website to enter email addresses of friends who might be interested in your service. You can then follow up with a direct email campaign. Make sure the referrer's name is included in the email, so you don't end up being deleted before being read. Even better, provide a button to allow visitors to instantly refer their friends to your site. This is likely to be well targeted as people will only send a link to friends who are truly interested in your product or service. Proctor & Gamble did this and generated 2m referrals!
• Keep records. Firstly to help with customer delight (Mrs Jones always likes to be offered Evian water); also to ensure you record all referral information and put it to use - for example, by thanking the person who made the referral as well as following it up.
• Keep networking and always be on the lookout for opportunities to build relationships. Find out who the influencers are and cultivate relationships with the movers and shakers in your community. Go for quality over quantity though - or you could spend too much time at meetings.
• Listen out for the "language of referrals". When people say things like "I want…"; "I can't…"; "I wish…"; or "I don't know where to…", they are providing you with an opportunity to refer them to one of your products or services. You'll be helping them solve a problem and will make a sale in the process. Train your team to pick up on the signs.
• Referral schemes are more successful if both the referrer and the person being referred share the benefits, so structure your scheme accordingly.