REFERRAL MARKETING
Generate referrals from loyal customers
Did you know that Texas Tech showed that 83% of consumers are willing to refer after a positive experience – yet only 29% do? This is a missed opportunity for many businesses, especially when you consider two statistics from Nielson: 92% of respondents trusted referrals from people they knew, and people are four times more likely to buy when referred by a friend.
As you lay out your referral program, make sure that you reach out specifically to satisfied customers; making such a request of those customers who are less than enthusiastic about your service doesn't generally work out too well. Customers participating in loyalty programs are an obvious choice. You can also target customers who respond positively to customer satisfaction surveys. If you don't have either of these resources, focus on repeat customers. You can also test where asking for referrals is most successful within the customer lifecycle.
Once you have established a target audience and laid out a plan for capturing referrals, consider how to reward customers who participate. A study by the University of Chicago found that non-cash incentives were 24% more effective at boosting performance than cash incentives. Our travel and lifestyle incentives provide an alternative to cash. A customer might forget the $20 you discounted from their bill, but a mini-vacation is naturally memorable.