​Referral Marketing: How to win new customers through your existing ones

4 minutes of reading

​Referral Marketing: How to win new customers through your existing ones

Let's say you meet an old fellow who is just looking for a job. He asks you for an advice tip and maybe you have even heard of something. At the same time you remember the old times and how unreliable your old fellow was. You hesitate as he would refer to you when applying. And depending on his performance, it might put you in a bad light. If you are not confident, you will not talk about your job idea.

It is just the same with recommending companies or products. You will only recommend products or services that will not put you in a bad light. On the contrary, you will be much more likely to talk about negative experiences in the field. The social web (blogs, Facebook, Yelp) supports spreading your negative experiences not only to a small group of people but to every potential customer.

That said, it is obvious that happy customers build the baseline for successful referral marketing. You cannot expect your disappointed customers to do the marketing job for you. First, you need to deliver and convince with the product and service, best would be both. People do not talk about average or "okay", they talk about outstanding experiences as customers and there are plenty options that can make your customer happy, it must not be the cheapest price or fastest delivery.

And you already knew it: you cannot just be good once, you need to meet or better exceed your customers expectations over and over again. If you do so, they will start recommending you.

But that is not everything you could do in order to make use of recommendations. Even if you cannot enforce recommendations, you can of course make it easier to refer a friend or at least show your customers that you value their recommendations.

Depending on your business, this can be very easy. Let's say you are in the online world, running an app or website that your customers engage with: Here it is very easy to receive recommendations, for example by integrating social sharing buttons for Facebook, Pinterest - you name it. Such a recommendation is of course not as convincing as a personal conversation between your fanboy customer and his friend, but it is much easier to integrate and to get.

It is a lot harder to influence or support recommendations for offline businesses or recommendations that take place offline, meaning face to face. However I have some options for you to think about:

  • Directly ask your customers for a recommendation if you sense that they like you and your service. No need to feel pushy or demanding, it is fine to do so. This is especially true, if you know your customer has a friend who would be perfect match, probably the customer you would dream of. Just ask your customer to talk to his friend about your service and experience.
  • What if you have somebody who is interested in your service, but not yet ready to sign. Even if your potential referring customer and the other one have never heard of each other, you may ask your happy customer for a favor. Just ask him, if you could refer your potential client to him for a short chat. Almost nobody will reject your request.
  • Write about your customers. I mean write interesting content about your customer and his business. Please forget about your PR interest for a second and focus on your customer, the article should be about him or her. You could for example use your blog to interview or showcase your different or most interesting customers. First, he will probably like it. Second, he will probably share it within his social circle and both of you will benefit from it.
  • You have some colleagues working on the same thing? Great, so you already have a fanbase (hopefully). You could reward your colleagues if they refer a prospect, but most of the time they are proud of your service anyways and sometimes only need a hint that prospects are highly of interest.
  • Setup an affiliate program, but make it transparent for both sides. You could for example reward anyone who brings you a new customer, be it with cash or with whatever it is you are offering - free consulting hours, free usage of your product, a discount for the next order. The probably most famous bring-a-friend program in the tech world is by Dropbox, where the referring as well as the referred receives additional storage from Dropbox. It worked great for them.
  • Last but not least there are a lot of websites build around evaluating businesses such as Yelp. If there is such a site for your industry, you should be there.

I hope those tips were helpful and inspiring for you. Always keep in mind: There is no channel that is as cheap and as promising than referral marketing. Make your customers happy and make it easy to tell their friends.

by Axel von Leitner (G+) about marketing and sales

What do you think? Write down your thoughts.

Write a comment, we'll be happy to read it.

Who's behind all this?

CentralStationCRM is an easy to use CRM system for small businesses. We help you to stay ahead of your contact and customer relationships.

You might want to learn more about our software or get to know some of our customers.