The probability of selling to an existing customer is 60 – 70%.
The probability of selling to a new prospect is 5-20%.
If you don’t put energy into ensuring the success of your customers, you are going to have a difficult time in business. Statistics don’t lie.
After you gain a new customer and deliver the product or service to them, continue the buying process to extend beyond the point-of-purchase. Referrals are one of the strongest business growth factors available to you, so take advantage of it.
Referrals As Part Of The Buying Journey
Almost any business can incorporate referrals into their buyer’s journey. Some companies mention referrals before the sale, incentivizing the customer by offering a discount with that referral. Other companies will present the referral bonus immediately at post-purchase or within follow up days, weeks, or months later.
It is my recommendation that you ask for the referral after the prospective customer experiences working with your company so they can authentically speak to what you are offering. Otherwise, you are more akin to a blind affiliate marketing perspective with an affiliate focused on earning for themselves rather than sharing value with others. The latter is always the perspective you should go to the market with, so you would want the same of your affiliates!
Every step of the buyer’s journey should be simple, logical and clear. The same criteria must be held when identifying how you will ask for referrals in this process. The channel can be online, offline, or a combination of multiple channels. Regardless, since referrals are such a powerful, lucrative sales tool that helps to sustainably automate your business, it deserves attention.
Ideas for Referrals
Here are a few ideas for including referrals in your follow-up:
- Cash incentivized referrals
- Bonus feature incentivized referrals
- Giveaway drawing tickets for special prizes
- Mandatory referrals for doing business together
- Exclusive access to special events or information
- Free additional time as customer (if you offer a monthly service)
- Upgrade incentivized referrals (upgrade from a mid-tier offering to top-tier)
Take this list as a basis to start brainstorming ideas for your own business. It is by no means exhaustive, but it is varied for idea generation purposes.
Bring Referral Marketing Alive
After you identify what is a fitting referral or incentive idea to build onto, you can begin designing the form. Ask yourself questions such as:
- Will this be presented online or offline?
- How can you digitize an existing referral process?
- What would provide the easiest experience for customers?
- Can you test two or three ideas?
Ultimately, you want this tactic to become systemized so that it can continue as your business grows and changes in years ahead. While perfection is not the goal, true process is. Having referral marketing systems (or processes) is how you control this tactic as a growth lever in your business and iterate on it over time. If introducing digital elements to the strategy isn’t fitting today, it may be tomorrow. But to make that transformation, you need a system to start working on.
Referral marketing is a lost art.
This appears particularly true with digital marketing and the changes marketers have seen going from relational businesses to transactional, digital businesses. However, we are returning to the relational focus. This is what human nature thrives on. Human nature is what business thrives on. As we return to this core principle in business operations, we will see referral marketing become a core strategy again. Rather than wait, begin exploring how referrals fit into your business today, and how they can be digitzed.