By Jean McIntyre (Marketing Angels)
Jean Mc talks about the importance of supplementing advertising with other marketing tactics and how a referral plan can help you grow your business.
I’ve had a few chats this week with clients about advertising. The comments are always the same: “I’m spending megabucks on advertising and I hardly get any work from it!”
I’m with them in some ways. In my view the advertising industry is all about money, money, money and getting as much of yours as possible. Yes it’s very expensive generally and the return on investment is sometimes difficult to identify but advertising does have its merits.
The key to valuing advertising is not in how much direct business it generates – it won’t usually generate much – it’s in the brand recognition it creates. Advertising is about getting your target market (the media’s audience) to distinguish your business and understand the value of what you offer them. That way, when they recognise a need for themselves they are more likely to contact your business over your competitors.
Still, there’s a lot that has to happen between the ad and you getting the business. That’s why you need to have other marketing tactics working at the same time to make that process much easier.
A Referral Plan
One of those other tactics is a plan to generate referrals for your business.
You can bet that 8 out of 10 customers who are asked how they heard about a business will say “a friend told me” or something like that. In a place like Canberra we truly do have only two degrees of separation. The trick in business is to get those working for you.
What Goes in a Referral Plan?
Well, like all good plans you need to start with some goals.
- Think about how much you want to grow your business by this method, work out what percentage of referrals will lead to business (the effectiveness of your plan will increase this number) and how many referrals you’ll need to get per month and year to achieve this.
- Then do a SWAT to identify what you need to take advantage of, and what you need to fix in order to maximise your likelihood of success. The results of this become part of your tactics.
- Given this, work out what resources (people, money and time) you are prepared to put into achieving the goals and any changes you’ll need to make to have those resources available (eg: training, budget, schedule).
You are now ready to put together your referral plan tactics.
Some Referral Tactics
You know your business best and should be able to come up with some novel ideas to get referrals. Here are a few tried and tested ideas:
- Revamp your customer service offering – nothing brings people (and their friends) back like getting the service they desire.
- Develop a relationship with others who serve that market – there are other businesses out there that want to be able to deliver a value-added service to their customers. Get to know them and offer special packages for their customers if they refer them. It’s important though to keep these relationships going to achieve a good stream of referrals.
- Diversify your service – think of other things related to the services you currently offer that you can offer to your existing customers. Checkups, end of warranty service, reviews, training etc.
- Referral cards – give out a card to existing customers to pass on to friends and colleagues. You might consider offering them a discount or a reward for successful referrals.
- Reminders - at every opportunity – every communication with your clients, don’t forget to ask them to refer friends or colleagues to your business if they were satisfied. It usually takes 3 contacts at least to get people to take the action you want.
- Post service survey – give new customers a survey aimed at improving your service. Ask if they are likely to refer your business. You may even consider asking them to provide the name and contact details of someone they’d like to refer.
- Do a contest – Run a “Why I need and deserve….” contest with your customers and recommend they pass it on to people who might be interested. Collect contact details of potential customers and follow them up quickly. You can select and publicise the answer which best reflects your key messages.
There are loads of other ways you can generate referrals. It’s just a matter of doing a plan and thinking a bit laterally about how to achieve your goals.
I’d love to hear about other tactics your business has used to generate referrals.