Time To Read: 3 minutes

Promoting products or services to new customers through referrals is known as “referral marketing.” Referrals are among the best ways to generate sales leads, though obtaining these leads can be difficult to do consistently. There are multiple avenues to generate referrals from online and word-of-mouth marketing, to social media and email campaigns. Tapping into these networks should help businesses to proactively generate additional sales beyond the scope of their current market.

1. Perfect Your Local Listings

Local business listings are online portfolios that consist of information related to a business such as a name, phone number, hours, data, and other information. While most platforms do accommodate listings for free, businesses usually must register through the platform manually (or claim the business) before a listing can be made.

When a potential consumer is interested in doing business with an organization, they may use search engines to find out additional information about the company. These sites can also contain review systems; these reviews can be one of the first things consumers see, and they are vital in creating a positive impression. Take note of the number of reviews, the overall rating, whether the reviews are positive or negative, and if the contact information is correct. Listings should be maintained regularly and reviews should be responded to, as 97% of review readers read the business responses to reviews.

2. Leave a Positive Impression on Your Customers

Consistently creating positive impressions is essential to gaining new clients and customers, and can be considered a vital measure to business success. Below are some of the best ways to approach a potential customer:

  • Anticipate client needs;
  • Manage expectations and be transparent;
  • Share valuable content;
  • Provide regular updates;
  • Run relevant promotions and discounts;
  • Encourage interaction;
  • Problem solve;
  • Don’t overpromise; instead, overdeliver.

3. Strengthen Your Referral Network

A referral network consists of different people and organizations that refer clients to one another. It can be strengthened by increasing the number of avenues for referral, and by the addition of more businesses relevant to an existing network. Attending networking events, joining new referral networks, and reaching out to online networking communities are all great ways to strengthen a referral network.

Businesses may be more inclined to add another business to their referral network if they know the company performs well. Referrals also affect the referring business’s reputation. A company would likely be more willing to refer to another company if they knew that the company was streamlining a positive customer experience. Likewise, a lawn care company that uses software solutions might be more inclined to refer to a pest control company that creates a seamless customer experience by using similar software.

4. Utilize Social Media 

Utilizing social media can be an especially effective resource for small businesses to keep marketing costs low while connecting with prospects and customers. Social media also happens to be one of the most commonly used methods of communication, with the average person spending 136 minutes per day on social media. Having the right approach and content can help build brand awareness and increase your customer base. Some content ideas for that businesses can use for social media are:

  • Daily updates (if relevant/applicable);
  • Pictures of your business or workplace;
  • Asking and answering questions;
  • Interviewing customers;
  • Giveaways;
  • Employee introductions;
  • Interesting statistics related to relative market;
  • Product promotions.

5. Strive for an Authentic Business

Authenticity is slowly becoming a new brand standard. When quality and price are identical, another important factor affecting brand choice becomes purpose. Authenticity in a company’s purpose will allow consumers to establish a perception of the brand. The more widely accepted a company’s authenticity and purpose are, the more the brand equity and brand authority the company can gain. To establish themselves, some of the following strategies should be considered:

  • Define goals, mission, and purpose;
  • Promote authenticity in employees;
  • Maintain a core identity;
  • Engage with audiences on social media like Facebook and Instagram;
  • Be accountable, even if things are not going well;
  • Be charitable;
  • Follow through with intentions.

6. Set Expectations

A company that lets its clients and consumers know they are asking for referrals before working with them will set the expectation that referrals are important to them. Clients can be hesitant to give referrals, and even happy clients may not think to reach out to others in their network about their positive experience. It’s important to set the expectation that referrals are a part of the company’s business model upfront. 

7. Reward Your Customers

This strategy may not be feasible for all businesses, but incentivizing referrals can be a great way to get customers to be more proactive. 83% of satisfied customers say they are willing to refer to a business’s products or services but less than 30% do. Meanwhile, nearly 40% of customers said that the chances of referring to a business are greatly increased if they are incentivized.

Rewarding customers does not guarantee that referrals will increase profitability, as incentive costs can add up quickly. It is also possible that customers may not be interested in the reward or that the referred person may devalue the business knowing that the referral is incentivized.

Referral programs can be instrumental to business growth, but it is important to implement them correctly to continue the referral chain and repeat sales. Some of these strategies may seem simple, but when utilized regularly, they can have positive impacts on your business.