How Referral Marketing Can Help Boost Your Businesses Sales
Instead of looking at how you can boost your businesses sales, we are going to be taking a look at referral marketing. We are going to be looking at exactly what it is, how it can be integrated into your existing business model and how, most importantly, it can help to start growing sales within your small business.
To put it in its simplest terms, referral marketing is a strategy by which you encourage customers you’ve already sold to refer their friends and family members to also become customers through an incentive. It’s one of the most effective ways to gain more customers and therefore more sales. Referral marketing does depend upon word of mouth and your customers being incentivised enough to refer people they know.
So what are the most common ways that are in use already of incentivising existing customers? Well, one of the main ways which you may have already guessed. For example, if you refer a friend to a company that you already shop with they may give you £10 for every person you refer to. So not only does this give them the incentive but for the person, they have referred to they may also be encouraged to take advantage of the same scheme in return for the same financial incentive.
Why Is Referral Marketing So Effective
One of the main reasons why referral marketing is still one of the most effective ways of gaining custom is the method of communication that the whole strategy relies on and that is through word of mouth. Word of mouth has long been one of the most powerful ways of spreading the message about your business, what it stands for and what you offer the general public. It's one of the fastest ways of getting your brand known despite other methods having since come to challenge it such as social media.
Another reason why referral marketing is so powerful when it comes to gaining new customers and sales is the referral aspect itself. They are being recommended to try your service and/or product by someone that they know. This recommendation brings along with it an elevated layer of trust as opposed to being told about your service by some stranger that they just bumped into on the street. And it is the value of this level of trust that will massively increase the chance of that recommendation converting itself into a sale.
How You Can Integrate Referral Marketing Into Your Businesses Strategy
If you haven’t yet integrated referral marketing within your business you need to first plan on how to introduce it into your business. First, you’re going to want to consider what incentive you want to offer. Is your business in a financial position whereby providing a monetary incentive to customers who have referred a friend or family member. If for any reason the business isn’t, another potential incentive could be to tempt them with 20% off their next order. This means that you don’t have the initial output of funds from your businesses bank account and also secures the business yet another sale on top of the one from the customer that has been referred. Another incentive you could potentially offer the customer includes a gift that can be one of your products or a trial of a service.
For referral marketing within your business to make financial sense, you also you will need to have terms and conditions in place. One of the main ones being that the referrer doesn’t have access to their incentive until the person that they’ve referred has successfully placed an order and had the order delivered. This prevents customers from getting their friend or family member to sign up purely for the £10 referral incentive and then not proceeding to place an order.
Why You Should Integrate Referral Marketing Into Your Business
In addition to it increasing your chance of boosted sales within your small business. Another reason that you should integrate referral marketing into your business strategy is due to how cost-effective it is. Although it does come at a cost such as a monetary fee or a discount provided by the business, this cost is minuscule in regards to other forms of marketing that can lead to new customer acquisition such as Pay Per Click campaigns or social media advertising campaigns. The costs of these alternatives will also bring you, new customers, however, in business, everything comes down to money and so you don’t want to be spending £400 on average to attract one customer if the overall price of your products and average orders are low.
Want To Know More?
We have only touched upon a few of the important points regarding referral marketing and how effective it can be. There is much more to integrating referral marketing into your business and optimising it so it can be as effective as possible in gaining you more customers and more sales. If you want to know more about referral marketing and converting more sales from your efforts then take a look at The Love Sales Hate Selling Academy
If you want to know about other ways in which you can boost sales in your business read on.
The PDF Version
10 Tips To Grow Sales In Your Small Business is a pretty long read.
You're busy and I don't expect you to read it all today unless you want to.
So I have turned it into a PDF which you can download for free below.
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