Build a Referral Marketing Plan With These 5 Tips

The old adage “it’s who you know that counts” can sometimes lead to big payoffs in business. By using existing customers as a source for referrals, you can increase business and find new clients without the expensive, time-consuming processes of cold calling and lead generation. Here are five effective tips you can use to build a referral marketing plan that benefits both you and your customers:

1. Don’t be afraid to ask for referrals – Don’t hesitate to ask existing customers for referrals. Look at referral programs as your opportunity to help your customers’ friends, colleagues and family in the same way you helped them. Customers are usually willing and occasionally eager to give referrals for others who could benefit from products and services they know and appreciate.
2. Offer a reward – Give existing customers a reward for making referrals. Typical rewards are a discount on additional products or services, coupons to use at partner businesses such as restaurants, or free items that customers can use. Rewards can be given when the referral is made or when the referral contacts your business or makes a purchase.
3. Time your request properly – The best time to ask for referrals is right after a successful and satisfying transaction. Alternatively, ask for referrals after your customer has complimented your products or services or made other positive remarks about your business.
4. Make sure your customers know who you’re looking for – Share your ideal customer profile with customers so they’ll know which of their friends and family can best use your offerings.
5. Remember the 80/20 rule – Just as 20 percent of your customers bring you most of your business, 20 percent of them will provide the largest number of referrals. Target your referral marketing program to those individuals.

What can you to do to build a referral marketing plan to get more referrals and new business from your existing customers?