Some Tips for Generating Customer Referrals

The best way to influence a customer is through a recommendation from a friend, so said Mark Zuckerberg once. The customer referral, or word-of-mouth marketing, is still the best way to attract new customers to your brand. Potential customers naturally trust their friends or family over company-made ads. Therefore, a recommendation from a peer has a much stronger influence than the slickest marketing trick your business can afford.

While word-of-mouth marketing is indeed understood to be powerful, it’s very difficult to master. It’s not like your business can visit the Facebook pages of all customers and convince their friends to recommend your brand. But there are effective methods to promote word-of-mouth, as illustrated by the successes of companies like Uber and Dropbox. Here are several tips for creating customer referral programs as recommended by our Corporate Business Solutions consultants:

Come up with Great Incentives—Obviously, what really drives a customer to make a reference to someone else is getting something in return from the brand. If a customer really likes your business, he or she may make a recommendation to a friend. But your brand can definitely change the ‘may’ to a ‘will’ with an incentive. The incentives to offer will depend on your business. You can offer discounts, free items, or free upgrades. Dropbox, for example, offered customers an additional 500 MB of storage space for inviting a friend to join. Find out what your customers really desire, and base referral incentives on that.

Aim for High-Quality Referrals—It’s not simply enough for a customer to mention your brand name in a Facebook post. The referral must result in a lead. That is to say that the customer making the referral actually facilitates a purchase, a subscription, or a meeting. It could be done via social media, email, or in person. So, when offering incentives, make sure it leads to a referral that facilitates a purchase. Offering gifts in return for Facebook mentions or social media shares thus may not result in generating new leads.

Choose the Right Time: Don’t ask customers to make referrals during the wrong time. You risk requests being ignored. Ask for referrals when the customers are most engaged with your product or service. This is the only time incentives actually work. Timing is key to making referral programs work.

Want to know more about how to create a customer referral program with a huge turnout? Then contact one of our CBS Corporate Business Solutions consultants.

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