WHAT IS REFERRAL MARKETING?
When someone you know recommends someone they know for a service you need, and you decide to use them because you trust your friend, that is referral marketing. Virtually everyone recognizes the phrase and its importance, yet those same individuals a often unclear of the specifics of how to harness its power.
WHY REFERRAL MARKETING?
According to the New York Times, 65% of all new business comes from referrals. That means on average, two-thirds of consumers make purchases because someone they know recommended a particular product or service.
Recent findings from Nielsen support the remarkable potential of referral marketing, observing that people are four times more likely to buy when referred by a friend. Strategic use of referral marketing allows professionals to tap into the power of consumer recommendations to achieve exceptional results.
- 65% of new business comes from referrals
- Customers are 4 times more likely to buy with referrals from friends
- Referral programs are among the least expensive marketing strategies
- Referred customers spend an average of 13.2% more than regular customers
WHY SHOULD I TAKE THE TIME TO LEARN ABOUT REFERRAL MARKETING?
Referral marketing is one of the world’s most effective, yet least understood marketing strategies. It is not taught in schools or universities and so few understand how to actually develop solid referrals for their business.
One myth is the limiting belief that you develop a referral business by delivering good customer service. While that has the potential to deliver some referrals, relying on it alone will never deliver the volume needed to build a referral driven business. When done correctly referral selling is a way to build the kind of relationships that create loyal customers who want to refer others to you. It is like having your own private sales force made up of loyal fans!
Referral marketing is a life skill, not just a sales or marketing technique. When we learn the necessary skills to build a refer driven business, the “side effects” of the process may be more valuable than the business itself. Here are a few:
- Gaining confidence in taking our business skills and aptitudes to the marketplace by bringing the marketplace to us.
- Learning to clarify and articulate your strategic who and why.
- Reveling in the relationship building process that goes way beyond mere “business contacts”.
WHO CAN BENEFIT FROM REFERRAL MARKETING?