The 5 Steps to Creating a Killer Referral Strategy
Posted on 18th October 2023 at 09:46
In the ever-evolving landscape of marketing, one strategy stands out as a powerful yet often underutilised tool – the referral strategy. Leveraging your existing customer base to bring in new clients can be a game-changer for your business. However, to create a killer referral strategy, you need to follow a well-thought-out plan. In this post, we'll walk you through the five crucial steps to build a referral strategy that works wonders. In the ever-evolving landscape of marketing, one strategy stands out as a powerful yet often underutilised tool – the referral strategy. Leveraging your existing customer base to bring in new clients can be a game-changer for your business. However, to create a killer referral strategy, you need to follow a well-thought-out plan. In this post, we'll walk you through the five crucial steps to build a referral strategy that works wonders.
Step 1: Why (Use a Referral Strategy)?
Before diving into the mechanics of your referral strategy, it's essential to understand why you should use one in the first place. A referral strategy is an ideal choice when you have a higher-priced product or service. It complements your existing marketing efforts and can also work as a standalone strategy. However, not all businesses are equally suited for referrals. For example, a fast-food outlet may not benefit from a traditional referral approach, but a system where customers can easily pass on information to their friends might be effective.
Step 2: Who (Are Your Target Market)?
To kickstart your referral strategy, you must identify your ideal customers and set rules for who you want to do business with. Remember the 80:20 rule – 20% of your clients bring in 80% of your business, but they can also be the source of 80% of your headaches. Don't hesitate to grade your clients and get rid of those who don't align with your business goals. Clearly defining your ideal customer sets the stage for a successful referral strategy.
Step 3: What (Are You Offering)
People will only refer others to your business if they see a compelling reason to do so. To make your referral strategy work, educate your customers about the benefits of referring friends and acquaintances. Highlight how it saves them money, helps ensure your business's long-term health, and allows you to maintain a high level of service. It's all about creating a win-win scenario for both your customers and their referrals.
Step 4: How (Are You Going To Encourage Referrals)?
Encouraging referrals is both an art and a science. To do it effectively, your products and services must be top-notch. Customers won't refer anyone if they have doubts about the quality of what you offer. Once you have that foundation in place, consider various referral strategies:
- Call and ask to mail your customers' friends a special offer.
- Use a 'Referral Price' to stimulate immediate referrals.
- Do regular mail-outs offering an incentive.
- Give top-notch service to get people talking.
- Hold 'bring a friend' closed-door sales.
- Ask the question – ever heard the saying 'who dares wins'?
- Make giving referrals a condition of doing business with you.
- Put on a seminar for your past clients and ask them to invite their friends.
These are just a few of the strategies you can use to encourage referrals. Remember, testing and measuring the effectiveness of these strategies is crucial to refining your approach.
Step 5: What else (do you need to think about)?
Finally, before launching your referral strategy, consider a few additional factors:
- Staff Training: Ensure your staff understand their role in the strategy.
- Gifts: Have incentives like gifts or vouchers ready for referrers.
- Check Stock and Staff Levels: Prepare for an increase in demand.
- Creating Powerful Offers: Craft compelling, high-value offers that attract attention.
In conclusion, creating a killer referral strategy is about understanding your customers, offering incentives that encourage them to refer, and implementing a well-thought-out plan. Referral marketing can be a potent force for growing your business, but it requires a strategic approach and a commitment to providing exceptional service and value to your customers. So, get out there and start turning your happy customers into brand advocates!
We run a referral stategy workshop for teams. Can be online or face to face where we help you choose your top strategies, create a plan to implement them and even help keep you and your team accountable to deliver the plan. Workshops start from £1000, please reach out to discuss how this might work for your business.
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