The Importance of Referrals
The importance of advertising and marketing is increasing day by day. With the many, often conflicting, messages, it is no wonder that consumers pay no attention to so many billboards, magazines and radio. Effective referral marketing does not have to include discounts, ad campaigns, fancy gifts or coupons. Many businesses avoid using rewards. The most important campaign for referral marketing is not a “campaign”, but a way of doing business.
This form of marketing uses another sales force to increase business. Also known as the existing customer base, this channel is highly effective and low cost. However, it does take some management to flourish. Referral marketing is the most cost effective and powerful target marketing any business owner can use. The most important factor is to ensure that you receive referrals. If you are not receiving any referrals, it is high time you implement this form of marketing.
Benefits of Referrals
Referrals do not involve direct selling. Instead a satisfied customer sells the products and services for you. If a satisfied customer tells a close friend about a certain business, then their trust is immediately transferred to the company, irrespective of if he has heard about it or not. There have been many instances where a person has had a negative experience with a particular company, but when a friend recommends him to the same business, he overlooks the negativity and gives the company a second chance. Industries such as professional services and consulting are often chosen solely on the recommendations of friends.
Referrals are considered the most cost effective advertising method for services and products. The amount of money spent on referral marketing ends up being just a fraction of the money normally spent on advertising. If you are not attracting new business through referrals, then you need to take a good look at the way you are treating your current customers. Always remember that current customers need to be treated well because they are ultimately the source of your income. Therefore, you should never take them for granted. They should feel that they are very important to the business and should be treated with respect.
Imagine the amount of profit you could earn if every customer is ecstatic and committed to your services and products and in turn, refers your business to friends. It is like a ripple effect – and you need to work hard to ensure that your business grows.
Referral marketing costs next to nothing, and yet you are able to reap rewards beyond your expectations. The key factor is to remember that customers are valuable and they should be treated well. Expect to get referrals, but do not assume and be overconfident. Instead, try to build your referral business into your sales and marketing efforts.
