The Art of Customer Referrals

Listen to this article

A small business must be fiscally conservative when it comes to laying out their marketing budget for the year.

Spreading the word about your business is one important component of your marketing plan that you can do relatively cheaply and, in some cases, for free. The Internet age has made this task much easier than it has ever been in the past, and the power of social media goes a long way in your marketing endeavors. Today, small and large businesses, as well as products and services, live and die by sites like TripAdvisor, Angie’s List and Amazon reviews.

Most importantly, your customers should always have a reason to talk about you. Maybe it is your exceptional pet food knowledge that helped them pick out a food for their allergic cat, maybe it is the fact that you carry out large bags of dog food to your customers’ cars, or maybe it is simply that you remember their dog’s name every time they visit. Whatever the experience is, you want to ask your customers to talk about it to their friends and, more importantly, on social sites.

So, what does it take to get a customer to talk about your business? Incentives.

People enjoy winning and being rewarded. Even small, inexpensive physical rewards can be enticing, such as keychains, that give the customer concrete proof of their achievement to show their friends.

You can institute a program that rewards your current customers for referrals and recommendations that spread the word in exchange for discounts and prizes. Think about the programs that many large companies have in place. If I give my cable account number to a friend and they sign up, both my friend and I get discounts on our monthly plans. Get five friends to sign up and get a free month of pay per view. Rewards can build to keep people continually referring.

Companies from all over, both large and small, know the value of referrals and recommendations. It has been reported that some companies even pay bloggers to write about their products or services, as well as write false product reviews. Although this is not ethical or ideal, it does reinforce how important consumers find peer recommendations, and the time companies are spending on making sure their online reputation is a positive one.

People are already likely to talk about their experiences, positive or negative, but giving customers an extra incentive to do so can jumpstart a loyal customer base. And just like that, at very little cost, your customers will do your marketing for you.

Some stores opt to offer a return customer discount of 10 percent, or a one-time larger discount for a positive comment on a site such as Facebook. Some businesses give a reward to both the referring customer and the new customer. You can make business card-sized referral coupons to accomplish this. You don’t have to offer the program to all customers, you can be selective and only offer it to your most loyal customers, if that is what you choose. Regardless, you should always recognize your most loyal referring customers. They will most likely become even more engaged in your business the more you recognize them.

Ultimately, you want to remember to remind customers all the time about the incentive programs in place. Keep your programs fresh and recognize your top contributors. Be sure to regularly review your social media sites so that you can ensure there are positive comments being made, and respond to your customer base to show that you are engaged and care about their feedback.