April 29, 2003 Feature

Referral Marketing—Having Others Work for You

Today's businesses approach potential customers and prospects in many different ways—the Internet, e-mail, direct mail, yellow pages, commercial advertisements, and more. Each day, consumers are bombarded with marketing and sales pitches, making them skeptical when it comes time to search for a desired product or service.

What if there was a form of marketing that established credibility, eliminated barriers of distrust, and expanded business in a very cost-effective and time-efficient manner? Well, there is, and it's called referral marketing. Referral marketing is an orderly process that you put in place to capture qualified prospects through partnerships forged with people in your community.

Traditional marketing ventures, such as advertising, do not appeal to the masses. People tend to react unfavorably to overpowering marketing messages and techniques. So the tools you use and the messages you communicate have an impact on your chances of sustaining and building your referral base.

Today, consumers choose nearly 50% of service-providing businesses because of a recommendation. Perhaps it's time to rethink your marketing strategy and start interacting with clients—your best clients—to build revenue and achieve the greatest return on investment.

A referral is powerful because it comes from a customer who has experienced your services firsthand. Colleagues are also good sources for referrals. The right colleague or business associate knows your respective deliverable so well that he's willing to stake his own reputation by recommending your services within the circles in which he lives and works.

More often than not, these referrals cost you nothing other than the time it took you to ask for the recommendation—yet many are afraid to ask. Don't make the mistake many small business owners make by not instituting a referral program as part of your marketing effort.

However, if you are having difficulty satisfying your existing customers, you can bet your referral business will suffer. Customer satisfaction is very necessary in today's ultra-competitive market place. So to ensure that you will have enough paying customers for the foreseeable future—and that you can satisfy their needs consistently—plan your referral program properly. Formalize your program and start promoting to your sources. The rewards will come over time.

cite as: Plesh, D. (2003, April 29). Referral Marketing—Having Others Work for You. The ASHA Leader.


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