That’s why word of mouth recommendations should be your number one indicator of success

0


August 10, 2021

8 minutes to read

Opinions expressed by Contractor the contributors are theirs.


The saying goes that when you do what you love you will never work a day in your life. But when your customers love what you do, you’ll find yourself able to unlock the most powerful form of marketing out there: word-of-mouth sponsorship.

Word of mouth referrals can be difficult to generate, capture, and quantify, so it may not be surprising that most business owners don’t focus on building their word of mouth revenue streams. .

But customer referrals are an extremely powerful source of leads and potential income. My partner and I have built a successful digital agency exclusively through word of mouth referrals for years. And whether you run a retailer or a service business, there are a number of compelling reasons why you should take advantage of referrals to grow your business as well.

Related: 3 Simple Steps to Growing Your Business Through Referrals

Word of mouth referrals are widely trusted by people

According to Nielson, 83% of people trust word of mouth recommendations from friends and family while 92% of consumers trust word of mouth referrals more than any other form of advertising.

In addition, data from Survey monkey shows that consumers are five times more likely to make a big purchase based on a trusted word-of-mouth recommendation than a paid ad.

They are free

John Wannamaker once said, “Half the money I spend on advertising is wasted; the problem is, I don’t know which half. We’ve all been there. That’s why part of the beauty of word of mouth referrals is that you won’t spend a dime on them.

They attract better clients and clients

In my experience, new customers who come from referrals move faster through the sales process, have more lenient negotiations, and tend towards greater loyalty because you are referred. On average, your referred customers will also spend twice more as unreferenced customers, making it an incredibly desirable source of business from an LTV perspective.

They reveal the most important added value levers for your customers

Over the years, I’ve learned that more than knowledge, more than privilege, more than even money, people tend to protect their relationships. When customers are ready to talk about your service and refer you to someone new, it means you really are doing a great job of serving them.

And whenever you’re referred, it’s a great opportunity to reflect on what your clients enjoy working with you so much. Is your turnaround time? Your collaborative process? The network of relationships you bring to engagement?

If you can identify the reasons why you were referred, you can reinvest in those aspects of your practice and improve your service offerings for all of your clients. Improving your service offerings will in turn help you gain more referrals which will grow your business and generate more opportunities to impress and improve.

Related: Want More Referrals? Here are the best ways to earn them

Ultimately, this virtuous cycle is why you should view customer referrals as your primary measure of success. Unlike your conversion rate, YOY earnings, or any other quantitative KPIs, referrals give you a qualitative view of what you are doing extremely well right now and help you chart what you need to do next to make your success worse. .

Four foolproof tips for building more business with referrals

Now you get it referrals are more effective than ads, completely free, generate more valuable customers, and provide you with actionable data that will help you improve your entire organization. But how do you get them?

If you are in direct-to-consumer retail, establish an online referral program and re-market it to your audience at the bottom of the funnel with emails, texts, ads, website terms. and a top navigation link. You can build your own referral program from scratch or use a technology partner that specializes in online loyalty programs, like Stamped.io, Yotpo or ReferenceCandy.

Related: 4 Steps to Maximizing Customer Referrals

If you offer a B2B service like digital marketing, gaining referrals from existing customers will take time and finesse, but there are a number of things you can do to maximize your chances of earning more. Check out these four sure-fire tactics that will help you attract more referred customers:

1. Adopt a people-centered business philosophy. The company is essentially a humanist company. Transactions are a function of trust, but trust can never be maintained in the long run if you treat people transactionally.

To be worthy of being referred, you must understand that your success is fundamentally linked to the success of your customers. It means being an honest communicator, taking maximum ownership when the going goes wrong, and most importantly, creating a work environment that fosters team success so you can deliver that ‘wow’ moment when it counts.

To get a good overview of the business boosting effects of treating your teammates as essential stakeholders, I recommend Set the table by restaurateur Danny Meyer.

2. Over-serve your customers. Want to know how CAA came to represent so many of Hollywood’s top talent? By integrating the “hereafter and beyond” into their daily practice. Their philosophy is that each time they recruit a new client, that client is represented by the entire agency.

And CAA is used to softening its services with original added values, such as support the causes that their customers care about. Working with a client’s favorite charity is not a typical business activity. It’s an activity that gives CAA the impression Following than a business.

Take a CAA page and take a holistic, caring approach to working with clients: allow your team to over-serve them when needed. Bring the full range of your interdisciplinary resources to address client issues. Anticipate and meet their needs before they ask.

By being a true partner to your customers at all levels, you cultivate the kind of appreciation that turns into word of mouth referrals down the road.

3. Turn earnings into action with an NPS survey. No matter how good your work, most people won’t formalize their comments without a nudge. The New Promoter Score or the NPS metric can provide both quantitative and qualitative data to help you understand whether you are successfully serving your customers and how likely they are to recommend you.

There are two types of NPS: the transactional NPS, which asks your customers how likely they are to recommend your product or service to a peer, and the relational NPS, which asks your customers how satisfied overall they are with your product or service.

If you run an online retailer, you can implement transactional NPS in a strategic location, like your post-purchase page or email feed. If you run a service business with a long-term customer list, administer a quarterly NPS relationship survey to keep track of the health of your customer relationships.

Since the NPS consists of a single question, you will get more participation than with a longer feedback request. Plus, taking action to improve your NPS score will help keep your customers happier and get them thinking about your worth. And that will all come into play the next time they’re asked to recommend a company in your niche.

4. Do not solicit, elawful. Generally speaking, it is not wise to ask for referrals directly. Comments on the NPS? Yes. Testimonials? Sure as long as the customer is happy. But asking a current customer to negotiate a new relationship on your behalf smacks of desperation, and you’ll quickly alienate your customers by treating them as stepping stones to new prospects.

Yet the reality is that most of your customers are closely related to other people in their industry who will need the services you offer later. And when they develop that need, they ask a trusted friend for a recommendation. So how can you make sure that the next time this happens your name will be the one that gets deleted?

The answer is to seek acts of generosity that bring great value to the lives of your clients. These simple steps will help keep your business in mind when someone asks for a referral. There are all kinds of generous acts and low-investment favors out there, but some of my favorites are: negotiating a helpful intro, giving out helpful information, or offering free beta access to a new unit. commercial or new service.

Over-serve your customers by showing that you are thinking about new ways to add value to their business beyond your scope of work. Keep in mind that the key to this approach is to be of service without while waiting for a counterpart. It’s about building cumulative goodwill and trust, not cashing in. No, you won’t find accurate attribution statistics for this form of business creation. And you probably won’t see immediate results like you would expect with a PPC campaign.

But if you’re serious about growing a business that can stand out among a sea of ​​competition, turn clients into evangelists, and attract the types of clients you want to work with, you’ll align these goals with your day-to-day dealing. client referrals as a critical measure of organizational health.


Share.

Leave A Reply