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7 strategies for cultivating high-quality business referrals

Posted by Shivali Anand

February 24, 2022    |     3-minute read (565 words)

There is no better source of leads than referrals that come from your own company's clients. If you provide stellar customer service, referrals will come naturally. But a concerted effort to foster more referrals can produce a higher ROI from your network.

Here, we will show you how to develop a referral program that benefits your company and clients.

1. Create marketing campaigns for your products or services.

Use email, text messaging and social media to generate awareness of your referral programs, then direct contacts through your sales funnel to convert them into leads.

Promote your referral program by:

• Displaying it on invoices, receipts, your website and in-store checkout areas.
• Creating a referral landing page from social media with an appealing call to action.
• Including a link to the referral landing page in employees’ email signatures.

2. Take a customer-centric approach to your business.

Take advantage of referrals from friends and family. Some 83% of people trust recommendations from their friends and family, and 92% trust word-of-mouth referrals over all other types of promotions, according to Nielsen.

3. Elicit, don’t solicit.

Asking people directly for references can be off-putting. Instead, perform acts of graciousness that add value to the lives of your clients. When someone asks for a referral, these small actions can remind them of you.

In the book "Generating Business Referrals Without Asking,” author Stacey Brown Randall provides two strategies for eliciting references:

• People make referrals to those who influence them; therefore, focus on connections.
• Clients will remember you if you produce high-quality work.

4. Provide incentives and rewards.

Express gratitude and offer recognition for every recommendation you receive. 

These types of bonuses can help increase your referral and conversion rates:

• Incentives that benefit both the advocate and new customer.
• Referral credits that can be stacked and used all at once with cumulative rewards.
• A discount on products or services.
• Gift cards.

5. Provide advocacy opportunities.

Focus on delighting customers in every interaction with your business to increase the likelihood of a referral.

Inspire customers by:

• Exceeding expectations.
• Including a client loyalty program in the mix.
• Maintaining a continual dialogue with them.
• Making it possible for them to share their experience.
• Sharing positive feedback from other customers.
• Using many avenues to distribute your information and resources.

6. Identify possible referral sources.

Concentrate your efforts on finding good referral sources by:

• Reaching out to an existing email customer list.
• Recognizing customers who have just purchased a second or third item.
• Keeping track of mentions and comments on social media.
• Identifying active customers and requesting reviews from them.

7. Making it simple for customers to share on social media

Make it easy for individuals to use your social media referral program. Provide a template that any referral source can use to distribute with a single click.

Tips on building a strong referral network

You’ll have a ready-made web of possible referral sources if you cultivate positive connections with customers, workers, partners and vendors. People who have been affected by your company’s concept, product or service can also be good sources. While turning to friends and family for referrals is natural, make sure they understand what you're doing first.

Make a special thank you on social media or by email to every referral source. Include a request for feedback or participation in beta testing of new goods or services in your thank-you note.

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