By Marcia Layton Turner
What’s one way to significantly get someone to buy from you? Have a friend refer them. That’s according to research from Nielsen, which reports that people are four times more likely to buy when referred by a friend to a particular business.
Referred customers are also more loyal and have a 16% higher lifetime value – meaning they spend more long-term – according to researchers at Wharton and Goethe University.
So how do you get more of these high quality customers? By encouraging referrals from other customers. Referrals can have a dramatic effect on a company’s bottom line, by providing a steady stream of customers very likely to buy.
Here are seven ways to increase the amount of referrals your business receives:
(1) Provide jaw-dropping customer service.
Many businesses offer an above-average level of customer service. Their employees smile, they respond quickly when customers ask a question, and they seem to care about your business. That’s what most customers today expect, at a minimum.
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To get customers talking about you to others – telling stories of how you went “above and beyond” to give them what they needed – you need to routinely do things that are attention-worthy.
Take the age-old story of the long-time customer who returned car tires to Nordstrom for a credit, which they received without question, despite the fact that Nordstrom has never, and probably will never, sell tires. Or the customer whose luggage got delayed before a major presentation, so a dedicated associate at local clothier delivered to their hotel a complete suit in their size, saving the day.
Your goal should be to have your customers telling similar stories about your business.
Did you pay the rush fee to get a customer’s order shipped in time for Christmas? Did you call around to other businesses to track down what your customer was after, but which you didn’t have? Did your team work through a weekend to be sure your client’s website was up-and-running by Monday morning? Or did your entire company attend a customer’s special event or fundraiser to show your support?
Brainstorm what you could do to get your customers talking about you in a positive way, then do it.
(2) Encourage social media sharing.
When customers do have that fantastic experience working with you, remind them that you’d love to have them share it on social media. You may even want to reward them based on how many social media platforms they post on. For example, you could offer a coupon for a percentage off their next purchase if they post a positive review on Yelp, share a photo of their new look on Instagram, or tell others about their experience on Facebook.
Offer easy-to-find links to your own social media pages, too, on your website, in your e-newsletter and in any emails you send out.
(3) Showcase your best sources of referral.
Use your best customers – those who are clearly delighted with your business and regularly refer business your way – as case studies for all to learn from.
Ask for permission to feature them on your website, in your marketing materials and even in your advertising, offering them a platform to sing your praises in their own words. They get the spotlight, you get the praise.
(4) Give referrals to others.
Probably the best way to boost referrals is to make a habit of referring business to others. The act of recommending another business to a friend or colleague can start a chain reaction that can lead to lots of new business. Just look at the for-profit business networking groups like BNI or online platform Referral Key that have systematized this exact process.
You can join such a group to tap into an established process for generating referrals, or you can start your own independent campaign to regularly refer customers, friends, family and colleagues to other businesses.
(5) Offer a referral incentive.
Many companies now do this – offering customers a thank-you gift of some kind for referring customers their way. This could be a gift certificate to your business; a gift certificate to another popular business, such as Starbucks or Amazon; or a bouquet of flowers or a basket of fruit, for example – something you’re pretty sure your customer will like.
Some businesses give the gift whether the customer buys anything or not, as a sign of appreciation. That’s the smart approach, which gets customers thinking about who else they can refer, in order to enjoy more thank-you gifts. Get It Straight Orthodontics regularly reminds its patients and their parents, that referrals net gift cards to area stores.
Offering an incentive for simply making the referral also takes the onus for selling your services off the customer and puts it back on you, where it should be. You don’t want to ask your customers to do all the work, only to encourage others to make contact with you. You can take it from there.
(6) Make a game of it.
Retailers could easily create a contest to encourage shoppers to refer their friends to the business, giving customers more chances of winning the grand prize for each referral they send your way. Host the content online and ask customers to refer their friends, “Like” the business on Facebook, or take other actions to support the business and earn additional chances towards winning. Or set up a box inside your business with slips of paper to be filled out with a new potential customer’s name and contact information in order to be entered into a raffle or drawing.
Then make the prize really, really appealing, like a weekend stay at a spa, or tickets to a major sporting event, or five minutes of shopping at the local grocery store. The more attractive the incentive, the deeper customers will dig to come up with names of friends and colleagues they can refer to you.
Of course, the key to all of the previous strategies for boosting referrals is asking customers for them. Research from Texas Tech indicates that 83% of satisfied customers are willing to refer others, yet only 29% actually do, probably because they were never asked to. Let customers know that you appreciate them and that you welcome their referrals; most people feel good about helping others, once they understand how they can.