Customer Referrals: 8 Reasons Why They Are Assets
By Kym Gordon Moore
Do you or your organization use some type of customer referral program to strengthen your marketing approach, while increasing revenue? Understanding and responding to the buying behavior of customers will help businesses and organizations connect to the decision-making process and increase the percentage of repeat, loyal customers.
Customer referrals, also known as word-of-mouth marketing helps the corporate culture tailor their marketing environment based on the buying behavior of their consumers. This type of marketing is beneficial to your current customers, target customers and your organization. Potential customers trust and find value in reviews, comments and recommendations by other consumers who used a company’s products or services.
While word-of-mouth is a great tool for attracting new clients, a business must be mindful that there is also a dark side to referrals. That happens when disgruntled and dissatisfied customers voice their opinions just as loud and vocal as satisfied clients do. Organizations must examine their liability options when responding to negative press, as many onlookers (current and potential customers, as well as competitors) closely monitor the manner in which you or your PR team handle these public challenges. Social media is making it easier for consumers to lash out at companies and organizations, just as much as it is used to beneficially praise and recommend a business or individual.
Here are 8 reasons why customer referral programs are advantageous:
1. Referral programs are a cost-effective way to gain loyal customers.
2. New customers, through referral marketing can increase profits.
3. Referrals introduce organizations to important contacts they probably would not have otherwise met.
4. Word-of-mouth marketing is a low-cost and effective tool to obtain better business leads.
5. Customer referrals can turn your loyal customers into an instrumental sales force.
6. There is an opportunity for increased customer relationship building and satisfaction through repeat customers.
7. Referrals are based on excellent customer service, products or services that will help your business or organization to thrive and be profitable.
8. Customer referral marketing will help to establish a long-term customer relationship.
When you have satisfied customers, more often than not, these consumers will spread the word about your products or services voluntarily. By offering your loyal customers an incentive through a referral reward program, such as using a discount code for more savings or offering a free gift, this can be an effective way to generate a great number of leads to develop a loyal customer community. Make the referral process easy for consumers, in order to avoid frustration and discouragement with your existing customers. There is a great deal of value with the implementation of a successful referral campaign. There are also some effective online customer referral marketing programs that could help to organize and develop your referral promotion.
Kym Gordon Moore, author of “Diversities of Gifts: Same Spirit” and “Wings of the Wind: A Cornucopia of Poetry” is an award winning poet, author, speaker, philanthropist, certified email marketing specialist and an authority in strategic marketing. http://www.kymgmoore.com She is co-founder of Favorite Things for a CAUSE http://www.favoritethingsforacause.com and was selected as one of the 2012 U.S. World Book Night Volunteer Book Givers.