Why Referrals are So Important to the Growth of Your Business

Growing a business is not easy. It takes a lot of effort and good marketing techniques. One of the most important of these techniques is word of mouth marketing, also often referred to as referral marketing.

Some of this word of mouth happens naturally. However, this is usually not enough to optimize the benefits you can get from using referrals to help your business. This is why it’s often a good idea to seek professional help such as word of mouth marketing with Talkable. Let’s take a closer look at why this is the case, starting with some insight into what word of mouth marketing is and why it has value.

What is word of mouth marketing?

Put simply, word of mouth marketing is about making best use of referrals that current customers make to their friends and relatives. These referrals happen organically but you have no control over this.

Using word of mouth marketing, also known as referral marketing, is a way of taking control and making sure that your business gets as many referrals as possible. This type of marketing involves the use of encouragement, reward and tracking.

How to encourage word of mouth for your business

In order to optimize word of mouth for your business, you need to provide a product or service that is either unique or is an important solution to a problem. If this is not an option, you need to tell a story that has meaning to customers and potential customers. Creating this type of story helps you to engage people, and makes them more likely to recommend you to others.

Further to this, in order to encourage referrals for your product or service, there are some steps that you can take.

  • Create an experience that is shareable. For instance, you could encourage customers to video themselves putting together a product that requires self assembly. You could then further encourage them to share these videos across social media.
  • Concentrate on excellent customer service. It’s a fact that happy customers are more likely to recommend your business to others. This is why you need to concentrate on providing excellent customer service in order to ensure that your customers remain happy.
  • Create content that is likely to go viral. The simple fact is that there are some products which are difficult to excite people about. This does not mean that the product is not useful and that you cannot improve word of mouth about it. One way to do this is to create content about the product that is likely to go viral. This content could include instructional and educational videos that tell people how to operate a product or how it can help them.
  • Make use of a referral program. Using a referral program is often the most effective way of optimizing word of mouth for your product or service. This type of program involves the use of incentives in systematically encouraging customers to make referrals.

The value of referral programs to a business

You may be wondering just how much value a referral program can have for your business. Research has shown that people who become customers as a result of a referral are likely to be more loyal, and spend more, than other customers.

Given that this is the case, you can see why using a referral program make sense. This is because doing so expands your opportunities for making use of customer referrals.

In order to operate a referral program for your business, you need to offer an incentive to customers, such as cash or special discounts. You can get expert assistance to help you conduct a referral program and measure its success.

Why referral programs work

Referral programs work by encouraging word of mouth referrals to the right people. This happens because your customers know the friends and relatives who are most likely to benefit from your product or services.

This means that the people who receive the referral are more likely to engage with your business. Engaging customers in this way ensures that they are well matched to your products or services. This in turn means that they are more likely to remain loyal to your brand.

Using a referral program can also be a good way of determining the current levels of customer satisfaction for your business. You can get an indication of these levels by looking at how many customers are willing to act as referrers. A lack of willingness to participate in the referral program may mean that customers are not currently satisfied with your brand. If this is the case, you need to carry out further investigations.

In order for your referral program to work as well as it should, you need to make sure that referrers are genuine. This often involves using a database of customers who can create genuine and honest referrals.

Promoting your referral program

There is no point having a referral program in place if you do not promote it. This is because your customers need to be aware that there are incentives in place to encourage them to make referrals, recommending their friends and family to use your products or services.

Think carefully about the incentives that you want to provide. You need to make sure that they are attractive to your customers and to the people that they make referrals to, where applicable. Once you have determined what the incentives should be, you should promote them using the most effective channels. This could include featuring them on your business website and across your social media channels.

You can see that referrals can be extremely important to your business if you use them in the right way. In order to optimize the potential benefits, you need to create a product or service that solves a specific problem, and/or tell a story about your brand. It’s also a good idea to create a structured referral program that can help you to incentivise the right customers, in order to encourage them to provide referrals for your business.

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