For small business owners, word-of-mouth and referrals are often the biggest sources of customers system wide. That’s partly because these contacts have roots in their local communities, working to provide a great customer experience that results in even more referrals.
Regardless of the industry or business type, person-to-person marketing is critical to your future success. Your customers’ experiences carry credibility that can weigh heavily on others’ decisions to purchase or use a service. Even if you think you have referral attainment down pat, there is always room for improvement! Maximizing business referrals and creating an effective business referral program in marketing strategies for a small business can help you take your business to a whole new level of excellence and profitability.
Business Referrals: Free Revenue That Keeps Coming
While having a loyal customer base is crucial for steady growth, it is also important to attract new customers for your business to grow. However, promoting your brand through a robust marketing strategy can be expensive. Small Business Trends suggests spending “between 7% and 10% of your gross revenue on marketing.”
What’s so valuable about business referrals for small businesses is that they don’t cost anything for your loyal customer to tell someone about their positive experience.
How To Get Business Referrals
Exposure: Use Social Media Marketing for Your Small Business
It's easy to ask a customer to refer your services to their friends and family, but that customer is more likely to do so if you tell them specifically how. One way is to direct them to your Facebook page or hand out review cards to customers after each service, asking them to visit your various online profiles (Twitter, Yelp, Google+, etc.) and leave a positive comment.
If your business has a loyalty or referral program, mention it in all customer communication touchpoints. You can also make regular posts on your social media pages asking your customers to share their stories and inviting them to join your referral program.
Make Your Referral Program Easy and Worth It
Make sure the referral and review process are as simple as possible to encourage customers to follow through. Whether it’s a standard discount when you refer a friend or a discount code, make sure that the process of redemption is easy to execute and track. Don’t forget to promote this program to all your service customers.
The most powerful referral is word of mouth, and it’s important to be able to capitalize on that.
Keep an Eye on Your Reviews
Word-of-mouth marketing carries a lot of weight in a consumer society that trusts personal recommendations so much. Many businesses use the Net Promoter Score (NPS) to monitor their level of customer satisfaction. In a nutshell, the NPS sends a one-question survey to customers asking, “On a scale of 1-10, how likely are you to refer our services to a friend or colleague?” Those responding with a 9 or 10 are considered “Promoters” who “are loyal enthusiasts who will keep buying and refer others, fueling growth.”
Many customers also leave additional comments, which could be used as testimonials in future marketing. Whether your business uses the NPS or another system, be sure to monitor your reviews closely. Reach out to customers who leave bad reviews – which can be just as influential as positive ones – and try to resolve the issue by finding common ground. With customers who leave good reviews, reaching out to them and acknowledging their comments will put your customer service a step above the rest.
Show Your Appreciation
These days, a little personal business touch goes a long way with customers. You can make your business stand out by sending customers occasional thank-you gifts or rewards to show your appreciation. Consider sending an email to your customers (especially those who have sent referrals) that includes a special offer on services.
Offering something small to show your customers you appreciate their business will differentiate you from most other businesses, hopefully pushing customers to recommend you to friends and family.
It’s Easier with a Franchise
Franchise businesses have unique advantages when it comes to generating referrals. As part of a larger network, franchises can leverage their brand recognition and established systems to facilitate referrals.
Whether you invest in a franchise or convert your business to a franchise, you can adopt the national brand of the franchise company — making word-of-mouth a lot easier. Neighborly®, a company with a portfolio of 19 North American home service franchise brands, exemplifies how a well-structured referral system can drive business growth.
Neighborly's cross-selling strategy involves promoting complementary services across its various franchise brands. For example, a customer who uses a Neighborly plumbing service might also be introduced to their electrical or cleaning services. This not only provides convenience to the customer but also maximizes revenue from existing clients.
Grow Your Small Business with Business Referrals from Neighborly
As you incorporate a referral program into your small business, remember that it’s easier with help. When you are part of the Neighborly family, you benefit from years of proven and profitable expertise and experience — from opening your doors on day one with access to third-party support and software for assistance with the recruitment process, business plan development, marketing your franchise, and every other step along the way.
If you're ready to grow your small business, look at our Territory Map and determine which opportunities are available to start or convert your business into a franchise.
