A referred brand is a preferred brand, and a preferred brand is a referred brand”. This quote by Bernard Clive underscores the importance of referrals as a means of gaining customers in a business.
Customers are the lifeblood of any business – you can’t get enough of them. With competition in business as fierce as it has become, and innovative ideas leading the launches of new businesses almost every day, it is as easy to get into business as it is to fail.
If your business is to survive, you must create a product or service with a delivery model that makes your customers fall in love with you. What would it mean for your business if customers love your products so much that they become your advocates and go out of their way to share what you do with their friends and families? Think about the enormous benefits this can bring.
Your ads costs will be much less, while high quality leads vetted by their peers continue to stream into your sales funnel. How would that impact your bottom-line? Customers have always valued word of mouth opinions expressed to them without economic incentives.
This is seen when you consider that even after marketers have spent millions advertising a product, it is often the unsolicited recommendation that comes from a trusted source that tilts consumers into making a buying decision.
In this digitally connected era, referrals done digitally can still be considered word of mouth and is even going to have a greater impact than a paid sponsored post! A comment left on a blog post, a post made on a social media wall or a verified review left on a product listing has far more reach than word of mouth delivered in person.
How can you leverage the opportunity presented by customer referrals and advocacy to generate more sales?
Identify your potential advocates and keep them close
No matter how good your products and services are, some customers will never refer others to you. Some of your customers will buy your products, use it, love it and keep it to themselves. However, some would discover and use your products and feel like shouting it out from the rooftops. The latter category are the people you need to identify early to build a customer-based referral program that will generate revenue and boost growth.
How do you go about this?
The first step you need to take is to whittle down your target list from a broad list of customers to a shortlist. This can be accomplished by using one question you may likely have seen in use by customer-savvy businesses:
On a scale of 1-10, how likely are you to recommend our products and services to our friends and family?
This question should be sent as an email, or as an in-service popup if you have a member-based website or application.
What would you do with the responses?
Customers at the higher end of the scale (between 8 – 10) would make for the best advocates for your referral program. Now that you have identified them, you have a massive advantage – dedicate as much resources as you can into establishing an individualized relationship with these potential advocates.
Offer Excellent Customer Support
While you may want to think that this is obvious, be assured that the importance of customer support is lost on so many businesses that it has earned its place in this post.
When you consider that research shows that more than 70% of customers are willing to recommend a service to others if they have a positive experience, it becomes obvious why you should invest resources to see that happen. On the other hand, a complementary survey found that the number one reason why customers switch brands is that they do not feel appreciated.
Here are some amazing statistics worth thinking about: 35% of customers expressed disappointment with the services that they received from big businesses, against 5% of respondents who were customers of small businesses. This highlights the fact that when corporations become big, their attention detail reduces on the individual basis begins to drop. Where this becomes evident, the fastest is in customer service.
Keep in mind that the fact that your customers are not complaining does not mean that you are doing a great job. Their silence may be the fact that they have resigned themselves to the mediocre standard of businesses in the industry. If you need advocates who would shout about your services from the rooftops, then you need to wow them with the service delivery that you offer.
That is how you create brand advocates who would be willing to make referrals.
To keep yourself on your toes, you need to reflect on this question from time to time: If you were a customer, would you recommend your service to a close friend?
Individualize Customer Experiences
While the quality of customer support is important, it may not be enough to turn customers into enthusiasts. You may also require investing in individualized customer experience. Here are some useful ideas:
Call your customers by name
A great way to begin is by being personal with clients. Do you know their name? Of course, you do! So, why not address them by name as you work on projects together? This may not make them take out their phones to refer you to their buddy, but it will be a tacit reminder that you respect them as a person and view them as a person and not just an account. Beyond providing a service, your staff should have the objective of doing so on a personal level by maintaining a friendly, cheerful disposition always. Customers need all the help they can get to humanize your brand. When you take time to form a personal bond with customers, they feel valued and are unlikely to quickly forget the level of service that they have received.
Nip customer experience issues in the bud
Additionally, while customer support is designed to help customers resolve issues that they have encountered with your brand, customer experience should ensure that the issues do not happen in the first place. Fix issues before the customer notices them or complains. For example, if you notice that a customer is not making progress that is typical with others who buy a service, you could reach out to the customer and express concern, offering personalized help to get them onboarded. The customer will likely not forget that in a hurry.
Share the spotlight
Be generous with the spotlight. Share it with power customers who are your model clients. This could be in the way of a blog post, social media update, case study or a white paper. When you project your best users in this way, they become more engaged with your community and have a sense of belonging. On another level, when you share the spotlight with your ideal customer, it goes a long way to attract others who fit into a similar demographic to take your business more seriously.
Ask your customers for feedback
This is an area where a lot of businesses (mostly Nigerian businesses) miss out. We live in a country where businesses resent feedback from customers. If you provide feedback a few times, you have become silently branded a ‘’problem customer’’ who is given a back scene derisive nickname. The funny part is that you may be reminded how much of an oddity you are for failing to see how perfect their service is. You may also have experienced where you came back to a service provider with a complain, and they respond that they have sold more than a thousand units of that product and that you are the only person who has ever complained. In there is the implicit suggestion that you should check yourself again – you may be lying.
Listen, customer feedback is so important for the growth of any business that if you are not getting unsolicited feedback, you need to go out of your way to get them by asking customers specifically to provide feedback.
Asking customers for feedback is an indication that you recognize that you are there because of them. They are the consumers of the products and services that you sell and are in the best position to tell you what they don’t like about the way that your products are packaged or delivered.
Companies spend millions to conduct market research, even paying their customers to take time out and complete a feedback form. If you get feedback for free – consider that as a gift from your customers, and you should value it as such. Use feedback to improve the quality of service that you deliver, and your more customers would be wowed over your service enough to loud it to their network.
Research conducted by Dr. P. Dholakia and Dr. V. Morwitz revealed that merely asking customers for feedback is enough to get them to use your service again, irrespective of whether they provided the feedback. People care when you give a crap about what they think – so give a crap! It is good for business.
Some customers may leave negative reviews on social media. That is not a bad thing. The way you handle negative feedback can persuade others to bring their business to you. For instance, I bought a watch from a young drop shipper after that stopped working after just two weeks. I tried to get the matter resolved, but their suggestions did not work out. I left negative feedback on the product page.
The vendor went out of his way to send a new product over to me, verified it was working fine before asking if I would be kind enough to update the review that I had left on his product page. What do you think I did? I left glowing feedback indicating that I was now happy with the product, which was liked more than 20 times by other members of the Facebook community.
Introduce a Customer Referral Program
A referral program gives customers added incentive to recommend service that they are already in love with.
Numerous researches have shown that the lifetime value of a referred customer is much higher than that of a customer you acquired by other means. This is because you incurred almost zero percent customer acquisition costs, and the customers are more confident to make purchases from you as you have already been vetted by their community.
When is the right time to ask?
This is dependent on the industry you operate in. For some industries, you may require establishing a long and trusting relationship with your clients. For instance, an accounting firm would not want to ask for a referral just a couple of months into a relationship with a new client. For one, their kind of work has a long time-to-value, which means it may even be 6 months to a year before a new client begins to see significant results from the relationship.
However, in an industry like website development, it is not unusual to ask for referrals within a few weeks after completion of a satisfactory project. Whatever duration works for your industry is fine. What you don’t want is asking for a referral too early, and getting a no.
Once you have buy-in from a customer, you need to equip them with the tools they need to get started. This may include product brochures, case studies and referral links. It would also include a dashboard where they can monitor their performance and see how much they have made from your program. A service like GrowSurf is a low-cost platform that you can use to launch your customer referral program.
In conclusion
Keep in mind that the only thing that would make your customers refer you to their friends, family or colleagues is when you provide amazing service. Forget vanity metrics – the number one thing you should measure is the wow quotient of your service.
Achieving that wow is a critical factor in turning your customers into brand assets actively spreading the word about the amazing experience they’ve had with your business. Implement these suggestions in your business, nurture those relationships, provide consistent value, and your customers would morph into a formidable army of advocates!
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