Work it Out: The dollars and sense of referral marketing

2 December 2011 No Comments

Chellie Mejia

By Chellie Mejia, BSc

God bless the entrepreneurial spirit; that fire inside a person that tells them that they can and will be successful on an unconventional and seldom taken path and that drives them to keep getting up after more than their fair share of disappointments and failures.

Growing a business from the ground up is no easy task! It takes a considerable amount of hard work and self-discipline to accomplish, and a special type of personality to deal with the ups and downs. One of the biggest mistakes I’ve seen startup businesses make is to focus their marketing program exclusively to cold contact prospecting. Of course, with the important task of filling your sales funnel with regular, qualified prospects, every avenue is efficient, so flyer or postcard mailings and even cold calling can be an important part of any strategy – it just shouldn’t be the only part.

Have you ever heard the saying that the best advertising is word of mouth? Referral marketing makes sense for any business! First of all, it’s FREE. It reduces your expenses and even your sales cycle. When you spend less time cold calling and grooming unfamiliar prospects, you’ll have more time to focus on the needs of your clients and consumers, building your brand and establishing a positive reputation. And when you spend this time focusing on your clients and consumers, it only repeats the cycle!

Referral marketing has also been proven to increase sales closing ratios. According to sales trainer Tom Hopkins in “Sales Prospecting for Dummies”, closing ratios for cold prospects can be as little as 10% while that same ratio for referred leads increases to 60%.

You can reap the benefits of this tried and tested marketing method with just a few easy tips.

Timing is everything. I’ve been in offices where the referral request is printed on the same form as the one asking my general information, before the job is even started, let alone satisfactorily completed. Wait until your client is ecstatic with the turn out, throw in an extra service or follow up with unanticipated support, and then feel free to ask for a referral! If you take care of your clients, they’ll take care of you.

Be selective. Not every client you service may be qualified to provide you with a referral. Don’t ask clients that are just satisfied with your level of service. Remember, I used the word ecstatic. If they’re already raving about how great you are, chances are they won’t hold back on the compliments to family and friends too.

Return the favour. Rewards programs are usually very effective in marketing campaigns. Set up a program where your clients are offered a standard reward and know what to expect when they refer a customer, whether it’s a discount or a special product, etc.

Get back to the basics. Say thank you! Even it’s a customizable draft letter that you send to clients after a referral, a simple thank you can go a long way.

These tips are simple and easy to implement, but I promise, if implemented into a regular marketing program, they’ll do wonders for building your referral business! Happy prospecting!

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Chellie Mejia is a freelance writer, real estate developer and lifestyle coach. Follow Chellie on Twitter@chelliemejia. Visit her brand new website www.chelliemejia.com