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Understanding Marketing Volume IX: Referral/Network Marketing

Posted by Renee Watkins, Marketing Specialist, fi360, Inc. on November 10, 2015

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A thing of the past or does it still fit in today’s marketing mix?

Referral marketing is a method of promoting products or services to new customers through referrals, usually through word of mouth.  Such referrals often happen spontaneously.  However, there are things you can do to influence this through appropriate strategies.  Below is a list of items you can implement to increase your referrals.

  • Develop a referral program.  Implement a formal policy that if a current client brings in a certain number of new clients or leads in a given time period, they would be rewarded with some type of monetary gift.  The reward has to be worth the recipient’s time.  Therefore, items such as gift cards or tangible items of value always work best.
  • Survey Clients.  Send your client’s a survey that asks about you or your practice’s performance.  At the end of the survey, ask clients if you can use their feedback for testimonials.  Not only will this provide you with referral content that you can post on your website and social media accounts, but it will provide further insight on how you are doing.
  • Give a referral.  You’ll be surprised how many people will automatically return the favor.
  • Ask for them.  Most people are afraid to ask for referrals.  Don’t be!  If you are committed to your client’s satisfaction and experience, people are usually more than willing to write a referral for you.

While referrals are slightly “old school marketing,” they should always have a place in your marketing mix.  Referrals cost very little to nothing to acquire.  Yet, they help you build more trust among your current and potential clients, speed up the sales process, and lend themselves to easier closes.  Did you know that most closing ratios are only 10 to 30 percent?  Referral-based sales usually close at 50 to 70 percent!  With such a high return on investment, you’ll wonder why you didn’t start participating in referral marketing sooner. 

Be sure to keep an eye out for the last installment in the Understanding Marketing Series where we'll tackle developing an effective, efficient, and successful marketing strategy.

INSIGHTS 2016

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