by Niki Tudge
The lack of marketing strategy is where most businesses fail. Unfortunately, both extremes can fail, either ignoring your customers and potential customers or constantly “pitching” to your customers and potential customers – bombarding them with non-stop sales pitches.
Referral marketing is the most cost-effective method for a small, service business to market. Unfortunately, many confuse “referral” marketing with “word of mouth.”
- Word-of-mouth advertising/marketing is passive. By providing good reliable service, your customers, friends, and neighbors recommend or refer your services to potential customers with whom they may know or be acquainted. Word-of-mouth advertising/marketing is excellent, but it does not give you control over your marketing strategy.
- Referral advertising/marketing is an active program whereby you establish AND maintain a referral network with current customers, former customers, related business owners, unrelated business owners, friends, family members, nonprofit organizations, local government offices, and virtually anyone you have contact with, through which you inform them about your business in exchange for telling others about their business, reward them in some way for helping you (the reward may be as simple as recommending their company to others) or providing information of value for free (education, gift cards, discounts, assistance, etc.). In short, referral marketing is about establishing and maintaining a mutually beneficial relationship with your customers and future customers.
The 5 Fundamentals of Referral Marketing:
- Make cultivating relationships your priority.
- Make the time – schedule referral marketing time every day.
- Establish and pursue strategies for keeping in touch and keeping track of how you keep in touch. For example, our system generally focuses on providing free educational marketing and assistance regarding pet care and training.
- Establish how you will carry out your strategy – we will use as many methods as possible, from emails, personal visits, press, mailings (greeting cards, seasonal cards, note cards, postcards etc.), mutual events, etc.
- Know what your message will be – the message is the key.
By creating and delivering quality information and messages to your referral network, you will rise above the ‘sales’ hype everyone is inundated with daily.
How do Consumers Interact with Companies & Individuals?
The two ways most consumers interact with companies and individuals are:
- Transactional and,
- Transactional Relationships are focused on making the sale.
- Relational Interactions are more long-term oriented, where you gain and maintain a customer for life. You, as a small business owner, are far better equipped to establish and maintain relational interactions than large competitors and relational interactions are the most cost-effective and profitable over the long run for small businesses.
Referrals are critical to our business.
Potential customers rely heavily on their friends and family’s opinions and recommendations. Suppose a satisfied customer of yours or trusted referral partner recommends your services to a friend or family member. In that case, you have instant credibility with your new customer and a new customer that you didn’t have to spend any advertising dollars to get.
To a certain extent, good referrals will come automatically if you provide exceptional service and build your customer relationship. Nonetheless, you will also want to seek referrals actively.
Some of the best ways to get referrals are listed below:
- As we always mention and emphasize, under-promise and over-deliver. Some companies call this the WOW factor. Be constantly looking for opportunities to ‘wow’ your customers. This often means just doing what you’ve promised. Other times it means going above and beyond what is expected. Build and maintain a professional reputation. Return phone calls, behave professionally, be on time for meetings and appointments, and do not gossip or criticize your competition.
- Ask your customers for referrals and testimonials. Don’t solicit compliments or put your customers in an awkward position, but if your client is pleased with your services, ask for a referral, testimonial, or both. A simple “I am glad you are happy with fluffy’s progress. Here is a gift card for a friend or family member who would like to teach their dog to behave like fluffy”. But while being polite, you need to be specific. The more specific you can be, the more likely the referral will become a customer (it is no use to get a referral who is not a pet owner).
- You can offer a discount on services as a reward for the referral. For example, suppose you are pet-sitting for a customer over Christmas, and they refer a neighbor. In that case, you could profitably offer them a discount on their pet sitting during the same period since the two clients are physically close together, and easy for you to service both at the same time. You can also reward your customers who give you a referral with gift cards, future discounts on services, cash, or gifts.
- You can also offer free demonstrations, introductory classes, or seminars to groups or classes to generate interest in your services.
- Network regularly and make sure everyone knows you are around and in business. Send birthday cards to your animal clients, reminders of important dates, or any unique occasion cards. Keep your social media sites up-to-date and enjoyable. Keep your customers and clients informed via email of classes and new service offerings. Even if they don’t use them, they may know someone who does.
- Look for opportunities to refer your friends and family to your customers’ businesses or services.
- Attend networking groups in your business community. These can be very effective. Remember, marketing is all about building long-term relationships. It takes time for prospects to know you and, more importantly, trust you. Studies show it can take up to 10 meaningful contacts with you before a prospect will hire you or refer you. This is especially true in a “trust” reliant service like pet care and training. So keep at it and be patient, but be consistent.
- Joint Ventures and Affiliates. Establish relationships with other business people who share your customer base and business philosophy but offer a different service. Groomers, vets, and retail boutiques are an example. You can refer clients to them; they can refer clients to you. Have your groomer affiliate give one of your gift cards to every client. Your gift card adds value to the groomer’s service while encouraging a new customer for you.
- Track where your referrals are coming from so you know what works and doesn’t work, and then you can be proactive about showing your appreciation.
Happy referral building!