When it comes to finding new clients, businesses can do so in many ways. Whether a radio or television spot, or an advertisement on a website, social media platform or digital billboard, the goal is to reach new viewers. Another cost-effective way is to develop more customer referrals. In fact, according to The New York Times, referrals account for 65 percent of a company’s new accounts. As an important part of marketing, how can organizations more effectively accomplish this type of advertising?
One under-utilized way to get referrals is to simply ask existing customers if they would kindly refer your product or service to others. Based on statistics from Texas Tech University, 83 percent of customers are happy to refer a company's product or service, yet only 29 percent of these customers follow through. Often all it takes to get a referral is expressing your gratitude to existing customers whose expectations have been exceeded and showing them how they can refer your company's products or services.
There are considerations, however, concerning when to ask for that referral. When it comes to a customer who requested a rush job to have their website built over the weekend, it might be more effective to ask for a referral immediately after they’ve had a chance to see the website. Following up shortly after the project’s completion can make the most of a referral request because that’s when the client is most impressed.
There are other scenarios when it could be more effective to ask for a referral well after the sale. When it comes to enterprise application software, such as software that backs up files passively in the background at each user's endpoint, or when using automated billing or payment processing systems, clients will not see the results for a few weeks, months or longer. For products that produce results over the long term, ask permission to follow up with the client in 90 or 180 days for feedback on how the product has performed. A client might not need a backup for six months; and it could take a month or two for a client to analyze their sales reports to see the software’s effectiveness.
Leverage Social Media Platforms
What matters less than the type of social media platform is the ease and ability of a company to use this media to ask for and receive a referral. If a customer expresses a highly positive review based upon a recent experience, social media can be leveraged to increase referrals for a business. Push friendly reminders and embedded links via social media, email newsletters and on your website to encourage clients to post a Tweet, Facebook comment or photo on Instagram as a referral for your company.
While there’s no single avenue to seek new business, taking care of your current clients is one way that can pay dividends now and in the future.
SlideShare: 65% of a company’s new Business is from Referrals
Texas Tech Today: Why Referral Marketing Works and How to Use It