Creating a sound referral program is an essential part of any small businesses marketing practices. The reason for this should be obvious; even so, most small business owners neglect to ever turn their referral marketing into an actionable system. Any successful business is made up of systems. Systems to create efficiencies and speed of delivery of goods and services.
Develop A Sound Referral Program, Now!
This should also be true of your referral program. You need a referral program, which guarantees the delivery of new business opportunities and hence new customers. However, before you can build such systems you need to really understand the nature of referrals and referral marketing. Here’s a quote from Rocket Referrals that sums up the equation:
A referral is the bridge that connects a company to a new client by means of an existing customer. Because of this direct link between the company, customer, and prospect, trust transfers. Therefore the barriers that exist with a typical prospect and the company are broken down by way of the active promoter. As the trust transfers, the resistance is diminished, and sales are much easier to obtain.
Science in the field of social network theory describes the pre-existing connection between current customers (A), companies (B), and prospects (C) as triadic closure. According to sociologist Georg Simmel “if a strong tie exists between A-B and A-C, there is a weak or strong tie between B-C”. In other words, a link between a company and prospects already exists via current customers. Referral marketing aims at exploiting the relationship between your customers and prospects – as it yields a much higher conversion rate and research shows it brings better fitting and higher profitable customers.
I want to give Rocket Referrals all the kudos they deserve for what they stated in this quote; however, a good referral program can generate leads from other places than customers. Some of my best referrals have come from friends and business associates who were not my personal customers. However, the best referrals are no doubt from customers! But, you should have a first rate referral program integrated into your corporate sales system for sure.