Let's give them something to talk about
"We let the customers be our marketing. Historically, our number-one growth driver has been from repeat customers and word-of-mouth.” – Tony Hsieh, Retired CEO, Zappo
Your best leads are going to come from referrals
When we talk about lead generation these days, most of us will automatically think of online ads and content, social media, or email. But your strongest leads will likely come from your existing customers or your network. And those referrals could become your best customers.
Some interesting stats around referral-based lead generation:
- 28% of millennials say they won't try a product if their friends don't approve of it
- 82% of all people trust referrals more than any other type of marketing
- Word of mouth is the primary factor behind 20-50% of purchasing decisions
- Customers acquired through referrals have a 37% higher retention rate
A happy customer is worth thousands of dollars in marketing
How many times have you relied on online reviews or recommendations from friends and family? Probably more than you realize. Every time you talk about an experience or service you’ve had; you’re providing a review for a business. By making it easy for customers to refer your business and help their friends and family, you can enhance your relationship with them as well.
A recent personal experience happened when three different friends recommended a real estate focused website. It’s an open secret that I am obsessed with residential real estate and this site was completely unknown to me.
When I checked back with all three of the referrers, they too had learned about the site from word-of-mouth. This is not a new site but new to most consumers. Whatever original marketing or campaign the business did to raise their visibility; it was referrals that drove us to their site and becoming leads for their services.
Make it official
A formal referral program can increase lead generation substantially. A study by Heinz Marketing shows companies with a formal referral program or process report nearly 40% of leads come from referrals. Companies without a formal program in place report only 22% of leads result from referrals.
Referral-based leads can also be better for your business for a few reasons:
- Trust. There is an inherent trust factor when it’s a personal recommendation.
- Targeting. Your customers or network knows what their friends and family need, so recommendations are more focused.
- Cost-effectiveness. Most of your marketing is really nurturing your existing relationships with your customers and your network, so costs can be lower.
If you build it, they will come…
Create your own referral program for your customers. Make it easy for them to refer you to their friends and family:
- Add a referral button on your emails and website
- Highlight positive online and customer reviews on your website and in your marketing
- Provide great content that customers will want to share
- Hold referral events (i.e., bring a friend)
- Ask at the right time. When a customer is happy with your service, they will be more open to referring you to others
- Offer helpful referrals to your customers – utilize your referral network, offer guest blogs or newsletter articles to your network
- Reward customers for referrals – charitable donation, thank you gifts, acknowledge and appreciate the trust they’ve put in you and your business
There is also value in creating a referral program with other professionals in your network or community:
- Join community networking groups
- Seek out local professionals that offer synergistic services and work together to refer leads to each other
- Provide your network access to your customers via guest newsletter articles, guest blogs or shared events
- Participate in community events or fundraisers
Your customers are your best marketing. They know what you can offer and the value of your work. By providing them with the right, simple tools to recommend you to others, you can gain new customers and strengthen relationships with your existing customers.
Related articles:
Small talk can lead to big marketing payoffs
Online reviews: What others say matters (a lot)
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