When you think about it, most of your business likely comes from referrals in one form or another. Referrals typically have a 30% higher conversion rate and, when current customers are satisfied, 69 percent of customers will recommend you to other people. In fact, 2.4 billion conversations take place every day in the United States that focus on brand-related content. So, if referrals are so crucial to business growth, why aren’t referrals a part of most business marketing strategies? Not taking the time to focus on your referral channels is a missed opportunity. Learning how to start a referral business will help you boost your lead generation and conversion.
Benefits of referrals
So, how can you really benefit from starting a digital referral business as a part of your marketing plan? While we have already shared a couple of statistics, they are only the tip of the iceberg, so to speak. Some other benefits and referral statistics include:
- 82 percent of sales leaders believe the referrals generate your best leads.
- Referrals and word-of-mouth can boost the effectiveness of your overall marketing efforts from 54 percent.
- For every single happy customer, you can receive an average of nine referrals.
- 92 percent of potential clients trust a referral from friends and family.
- Referral leads have a 16 percent higher lifetime value than other marketing techniques, as well as a 13.2 percent higher spending rate.
- 86 percent of businesses with a structured referral business marketing strategy experience revenue growth within two years.
- 33 percent of Facebook users choose to use a brand based on posts made by friends or family members.
- When referred through social media platforms, 71 percent of consumers are more likely to use a brand.
How to start a referral business
The purpose of starting a referral business is to attract new leads for your business. Understanding your goals, such as which leads you want to attract, and how to achieve those goals is essential to starting a referral program.
Here we go over some tips on how to nurture and engage your customers in order to promote a good customer experience and reliable referrals.
Establish an online presence
Before you begin an active referral business, it is essential that you establish a positive online presence that will allow referrals to find your business. This includes a business website and social media profiles. Make sure that these sources have a way to capture new referrals, such as email signup or newsletter registration.
Deliver a great experience to the client
Great referrals begin with happy customers, so every referral business must begin with providing a customer experience that meets all your clients’ expectations. When you do this, clients are more likely to spread the word and send potential clients your way.
Build client loyalty
Client loyalty is the measurement of a client’s willingness to continue engaging and purchasing your product or service. Establishing customer loyalty is an important part of increasing the lifetime value of the client. It is also a way to boost referral prospects. Providing a high-quality customer experience during the loan process is a great way to start building client loyalty. Asking for feedback after closing can help show that you care about their experience and value their feedback to make improvements. Maintaining frequent communication through emails or social media helps keep your name in their minds and lets you keep them updated on important changes or promotions.
Make it easy for them to refer
While many clients will freely work to refer friends and family, others simply don’t know how. Providing them with easy referral methods, such as referral cards or referral links to your website, will allow them to easily send potential clients your way.
Law of reciprocation
When you give, you shall receive. This concept works when it comes to referrals and is the perfect opportunity for you to help clients and business partners while they help you. When you provide referrals to previous clients or partners, they are likely to repay the favor with referrals. For example, your last client was a plumber. You have a family member that has burst pipes, so you refer them to your client. He then remembers his sister is purchasing a new home, so he refers them to you.
Say “Thank you”
Any time you receive a referral, whether from a previous client or a business partner, be sure to say thank you immediately. This can be through a simple phone call, a thank you card, and a small gift.
Follow up referrals quickly
When you receive a referral, take advantage of the referral right away. While the referral has been sent your way, leaving them waiting too long may send them looking for an alternative business that is ready to communicate with them now.
Identify and explore formal referral/alliance relationships
Develop beneficial relationships with your business partners that can provide referrals for both of you. For example, if you work closely with a realtor, consider asking them to promote an article of yours on their website or emails. In exchange, you can feature a blog post of theirs. This cross-marketing can help promote both your businesses, as well as generate quality leads.
Many aspects of your referral business can be automated, leaving you to focus on direct contact with your clients and referrals. With a CRM, you can utilize things like automated website email list signups and then use customer referral templates for follow-up emails and more.
Let your referral business work for you
Establishing a referral business allows you to take advantage of your high-quality customer experiences and make it work for you. Your referral business can be your biggest lead generation marketing tool. Contact us so we can help you understand the importance of lead generation and how our services can help boost your leads even more. To learn more about how we can help boost your business, check out our Fastrack and Unfair Advantage™ programs today.