The Power of Customer Referrals

It was a happy day when I opened the envelope from Jodi at the “Clean Team” rug and upholstery cleaning company. Tucked inside was a certificate worth $45 in cash or cleaning services as a ‘thank you’ gift for referring my friend, Heidi, to their company.

Personal referrals are a low-cost and powerful marketing tool for big and small companies seeking to attract new customers. Big companies, like American Express and Jet Blue, rely on easy to use, online referral programs to attract customers. For example, if anyone I refer applies for and qualifies for a Jet Blue/Amex credit card, I would receive 5,000 TrueBlue® reward points. The person who signs up for the card also gets extra points, making the offer even sweeter.

One of the biggest projects I’ve ever landed came from one personal referral. After working with an executive at a major company on one project, I asked him if he would consider referring me to another division.

Take some time today to dream up a few ways incentivize your customers to spread the good word about you and your company. Your challenge is to keep it simple and come up with a referral program that fits your customer base. That means the owner of an environmental consulting firm would have a very different referral program than someone who owns a pet store.

Here are some suggestions to get those referrals going:

1. Make it easy for people to refer new business. For example, if you own a retail store, print up a discount coupon. Then, ask your loyal customers to pass them out to friends and associates. Don’t forget to add a tracking code to each coupon so you can keep track of responses. Then, offer your referral source a special discount or gift card.

2. It’s a bit trickier if you provide any sort of services or consulting. Begin by collecting positive references from your clients and customers. Next, ask a few clients if they know anyone else who might benefit from your services. Asking people who appreciate your talents to provide a short email introduction is an easy way to expand your network of potential clients. Be sure to respond quickly to any leads and circle back to thank the referral source.

3. Passive referrals are also effective. Ask your happy clients or customers to write short testimonials. (Be sure to obtain their permission to share them with potential new customers or clients). If you have an appropriate place to post positive letters or photographs, do it. Vets and pediatricians often create a photo gallery of happy patients. Obtain permission to post photos and testimonials on your website.

4. Reach out to former customers and client for referrals. Executives change jobs frequently and may be in a position to help you out.

5. Ask your friends and family members for referrals. Tap into their network to expand yours.

Email marketing and direct mail are great ways to acquire and engage customers.

To learn more about email marketing with pbSmartConnections, click here.

To find out how you can conveniently create, mail and track direct mail campaigns with pbSmartMarketer, click here.

Jane Applegate is an expert on small business marketing. She is the author of 201 Great Ideas for Your Small Business and can be followed at http://201greatideas.com/. Jane is not a Pitney Bowes employee and shares her insights on this blog as a paid contributor.