Why would I choose referral marketing?
Before we get to how to create a successful referral program online, we must ask ourselves why. With many lead sources out there, why would a business choose referral marketing for lead generation rather than more traditional marketing efforts?
Lead Quality
The quality of a referred lead is without a doubt higher than any other form of lead. Infact a person is 4 x more likely to buy if they are referred by a friend. The person referring business to you knows your business, products, and services. They also know or are associated with the person they are trying to introduce to you. Therefore, if a referral program system is implemented correctly, you will have a stream of referrals which are potential clients actively looking for your business offerings. You are selling what they want and you have been given the platform to converse without having to break down that initial barrier.
Lead Quantity
60% of marketers say that online referral marketing generates a high volume of leads. If referral partners are identified and nurtured correctly they will provide the majority of your leads and at much higher conversion rates. The time required for the initiation of a referral program through to yielding results is relatively instantaneous too. With marketing efforts like content marketing there is a time requirement and other inputs necessary, whereas with a referral program you can reap the rewards almost immediately.
Cost
The cost of this type of lead generation is the fraction of traditional marketing. The costs of online referral platforms is low and the required resource time is limited. This leaves it as one of the lowest cost per lead channels available.
So how do you make it work for your business?
Provide education
The best way to get a good return from this is to invest time in educating your potential referrers about your business. It is imperative to ensure that they know the basics about your products and services; what you do, how you do it, why you are different from your competitors, your USPs (Unique selling points). Once they are well versed in this, you can take your referral marketing to the next level.
It is important that your referrer knows exactly who you want to be put in contact with (industry, company name, name of contact or type of position within the company) and what you will do for that company or person. The details of the correct contact person within a company can often be found through LinkedIn or other social media channels. By targetting in on exact people, businesses and industries, you will demonstrate your target market and what you can provide for this market. Not only will this increase conversion and shorten the sales cycle, it will make it easier for the referrer. Other tips are to ensure that your website and social media efforts showcase your services clearly. This will mean that they don't always need to contact you to get information.
Choose your referral partners wisely
We have all heard of the 80:20 rule, 80% of your business will come from 20% of your customers. The same applies to your referral partners, so choose who you will invest your time in. Some people are natural referrers that can find a referral from just about any conversation. However these people are rare. A good approach is to find people that stand before you in the sales cycle. For instance, a photographer would be wise to team up with a wedding planner. The referral here is natural and the referral partner will find the transition easy. The same photographer would find it hard receiving referrals from someone completely outside of their usual business contacts circle.
Make it easy to refer
Once your referral partner has found leads for you then don't let them struggle to give them to you. Implementation of a hosted platform can prove very useful. These tools are cost effective and very simple to setup. Social media channels can also prove to be very useful here. LinkedIn has the endorsement and recommendation tools. A web developer with Facebook Application experience can assist here as well, an app can be developed to give a snap shot of your services that can be shared through Facebook, Twitter and Instagram. Once clicked it can capture the referee details for you.
By following the simple steps above you can setup a referral platform that will bring a long lasting surge of high quality leads that should yield strong conversions.