Many of our clients rate referrals as the most effective marketing and sales tool for their business. Given this feedback it’s surprising that few of the organisation we speak to actually formalise and maintain a referral program. In this article we explore the characteristics of effective marketing referral programs:
Identify the right clients
It’s important to target the right customers for referrals. Obviously you need to ensure they had a positive experience with your business but you need to consider other factors too:
- Does this client represent your target market? For example if first home buyers aren’t your target market, then you may not invite a first home buyer to join your referral program because it’s likely their friends and social networks share a similar demographic profile to them.
- Identify what they value in your business? Was it your customer service, the speed which you provided the service or the great rate you secured for them? It’s this “value” which they will tell their friends about, so it’s important understand what it was and repeat it.
- How long have they been your customer? Identifying whether they are a new or repeat customer will help identify the value of the incentive you should offer. If they have come back, after you help them with their first mortgage, then recognise their loyalty.
Once you’ve identified the clients you want to target, it’s time to develop ‘how’ you will get the referrals.
- Ask! One of the biggest mistakes we make is forgetting to ask for a referral. After a period of time has lapsed it’s too late. Strike while the iron is hot, if your customers are happy, you’ll be surprised how willing they are to refer your business.
- Make it EASY. Client referrals have to be easy. Provide your customers a one click link that invites them to rate your business on Facebook, or a template that simply asks them to provide the name and number of someone they can refer to you.
- Value – When providing an incentive, make sure it’s relevant and personal to your client. To do this you need to listen to your client. I.e. are they getting a mortgage for a new home? If so perhaps the incentive for a referral could be voucher towards a removalist, a bundle of packing boxes or even a massage voucher– because you know that moving house is hard work.
Evaluate and Focus on Success
Not every referral you ask for will be successful, so regularly evaluate your referral program. Evaluate what methods of referral are successful with your target market i.e. social, email or verbal. Evaluate what incentives are successful.
Lastly really focus on your successful referrals, ensure your thanks is authentic and thoughtful – a handwritten thank you can be very powerful.