Growing a small business does not have to cost big bucks. In fact, the secret to exponential sales growth is simple and free, yet extremely effective. I’m talking about referrals, which was the topic of a recent video in my Facebook tips series.
Of course, you probably don’t think of referrals as a ‘secret’ formula for success; you’ve likely read blog posts touting the power of referrals or heard other business owners talking about their success with referrals. But many of us don’t take referrals to heart (or use them effectively), so I’m here to say that when it comes to referrals, BELIEVE THE HYPE!
The statistics on referral marketing are incredible:
- Customers are four times more likely to purchase when referred by a friend.
- A referred customer is 18 percent more loyal than those acquired through other means.
- Referred customers spend 13.2 percent more than non-referred customers.
Referrals have been a goldmine for many small businesses. For example, VirTasktic, a business I personally use for content marketing and management, is 100 percent referral-based. They have grown continuously since 2011, increasing business (and sometimes even doubling it) year after year.
Tips for Referral Marketing
To achieve the same success, you have to know how to do referral marketing correctly! Here are some tips:
1. Exceed Client Expectations
Give every single client a reason to sing your praises by delivering high-quality work and the best customer service.
2. Know When to Ask
Many clients are willing to offer a referral, but businesses forget to ask! When you do ask, make sure the timing is correct. Good times to ask for a referral are immediately after a purchase, after a positive interaction (in person or on social media), or after a positive experience with customer service.
3. Set up a Referral Program
Statistics show that companies with formal referral programs see more revenue growth than those who do not. Other research has shown that the size of the reward doesn’t matter, and non-cash incentives are more effective than cash incentives.
For more referral tips, click play on the video above. Do you have tips or experience with referral marketing? Share them with your small business peers by posting your comment under the video.