Word-of-mouth marketing is one of the most powerful marketing tools you can use. It is estimated to be worth over $6 trillion annually and accounts for 13% of all sales. You don’t have to be a huge business to make referrals work for you. A successful scheme can be run for small businesses too.
What Is Referral Marketing?
Have you ever worked for a client who has then recommended you to someone else? It’s an ideal way to win work as it doesn’t cost much and a lot of the work has been done for you, rather than attracting clients in another way.
A referral program simply puts a structure in place to prompt and reward clients for sending new business your way. For example, if you’re a local business accountant, you can contact your current clients and let them know that you are opening a referral scheme that will benefit them for every client that signs up with you.
The Most Important Element Of Your Plan
Before you even consider launching a referral scheme, you need to be sure of one thing. That you’re good at what you do. No one is going to recommend someone to you if they are unhappy with your work for fear that it will also reflect badly on them. So before anything else, tighten up your client experience so that you have a service that people have no hesitation in recommending.
Decide On Your Incentives
Having a great incentive program needs to provide value to the people recommending you. This can be anything from a cash incentive, physical product, or money off a future project or invoice.
Existing clients may prefer money off, or enhanced service, whereas previous clients would benefit more from a one-off cash incentive or gift.
Promote Your Referral Program
Getting the word out there is the next step. There are a range of ways to do this. For example, you can mention it to existing clients in meetings and follow up with a personal email.
You could also use an email marketing system to send out a campaign promoting the scheme.
Include information about your referrals in your email footers and contact details. It’s also good to remind people about it periodically in case they forget.
There’s a saying in marketing that if you can’t track it, it didn’t happen. The same goes for referral schemes. You need to know where each of your clients come from so that you can track the effectiveness of your marketing efforts. Large companies might use specific referral or affiliate marketing platforms but when starting out you can bootstrap this by adding a client record to your CRM or contract that states who referred the client and when. This way you can ensure that referrers are getting their rewards and you can keep track of everything.
A good referral scheme can have a huge impact on your business and can be a strong source of revenue. If you don’t have one in place, start planning it now.