Benefits of Referral Marketing to a Small Business Owner.

Two-thirds of Americans are more likely to buy a product after seeing a referral from a friend on email or social media. Some 82 percent of Americans actively seek out recommendations from their networks when preparing to make new purchases. For a small business, statistics like these show that there are big benefits to referral marketing if yours is the name that comes to mind when your customers are asked for recommendations. Find out how to set your small business up for long-term success and reap the rewards of referral marketing.

What are the benefits of referral marketing?

Referral marketing offers many benefits beyond an increase in phone calls. Look for word-of-mouth marketing to:

How to increase Referral Marketing

Now that you understand all the benefits of referral marketing, how can you tap into it? More importantly, how can you ask your existing customer base to refer you without coming off as too salesy? Many small business owners worry about irritating their existing customer base with pushy requests for referrals.

To find success with referral marketing, learn what to do (as well as what not to do). Then come up with a referral program that incentivizes your brand fans and your personal network to refer your business. Strong programs work well because they get you the results you want while also delighting your referral partners. Finally, find some way to track referrals, so the right people receive the credit for business they drive your way.

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As part of your referral program, you’ll need to develop an incentive to induce referrals from customers. You might offer a discount on services or a premium freebie for a new lead. You might offer an exclusive perk, such as an early-bird offer on a new product or an end-of-season party just for your referrers. Let your customer base and your industry determine the right incentive for you. For instance, an early-bird preview party with complimentary wine could be on brand if you’re a small clothing retailer, but it would seem strange for an attorney. By providing incentives, you get to thank your customers for recommending you and you increase loyalty.

When you have the referral program in place, you can then encourage your network to deliver referrals. You might ask customers, after a sale, to share your referral program on social media or link to it from your business newsletter. At this point, you’ll see the work pay off as customers sign up to refer business to you.

It takes a lot of time to set up a quality referral program; however, once in place, the program will give back every day with only minor maintenance from you. Stop coming up with excuses as to why you can’t succeed with word-of-mouth marketing and set yourself up for success by learning the right tips.