Increasing income through customer referrals

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It is estimated that 20% to 50% of all purchasing decisions are made through word of mouth recommendation. So why not harness the goodwill and authority of satisfied customers and use them as an unpaid salesforce for your business? It’s a sure way of someone marketing your business for you, telling others that they’ve found it helpful and how someone else would too.

Here are some reasons to incorporate referrals into your business

Creates an Expectation

When asking a customer to refer you to a friend, it creates an expectation that your business and customers are working towards the same goal. Hopefully this reinforces your customers commitment to your business and their desire to keep buying from you. This sense of excitement transfers to the person they refer you to. You want your prospective customers to come to you with a strong, positive impression from the start, which means getting the sale is easier and improves your likelihood of closing the sale.

Referrals make more referrals

When someone buys goods or services from your business based on a referral from an existing customer, they’re more likely to inform others if they had a great experience. Why not ask for a testimonial and distribute it on social media (of course, ask for their permission first!)?  Doing this will transform each person giving you referrals into an additional salesperson for your business!

Shows why customers do business with you

When a customer calls a friend or a counterpart at another company and refers them to you, it reminds them why they like to do business with you. The reason could be a customer service representative they love dealing with or simply the high calibre of product or service you sell.  No matter the reason, when they tell others, it reaffirms that your business offers them a valuable service or product.

Referrals are low cost

The cost to your business when one of your customers refers to your goods or services is practically zero. You haven’t sent any emails or paid a sales person to stop by the customer’s premises. Word of mouth is a strong driver of sales for any business. Once you establish a way to harness the customer referral process, it will keep building without expense to you.

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