When you think about your various relationships, what would you say are the fundamental building blocks that keep them healthy and mutually beneficial?
Three things that jump to mind are trust, communication and reciprocity.
When one of these vital components is missing, the relationship is unsustainable and unlikely to thrive.
The same can be said of referral marketing. Trust, communication and reciprocity are all essential to getting it right.
This article explores how you can do just that. But before we explain how to do referral marketing, let’s take a look at what it actually is.
Why is referral marketing important?
Referral marketing is all about developing relationships with customers and clients so that they’re more inclined to recommend your products or services to others.
Most businesses rely on this model in some way, shape or form.
In fact, figures show that 82% of SMEs rely on referrals as their main source of new business.
The power of referral marketing comes from its ability to tap into existing social networks and turn customers into advocates for your business. It’s a way of building brand awareness and credibility.
This makes referral marketing one of the most powerful lead generation tools available.
Ultimately, people are more likely to opt for your service over a competitor’s if someone they trust vouches for you.
But before you reap the rewards of a thriving network, you need the right strategy and system in place.
How to get started with referral marketing
Whether you’re completely new to referral marketing or already generate significant business from it, there are always ways to fine-tune your process and get more from your strategy.
Here are some key things to bear in mind:
1. Know your target audience
Whether your focus is on referral marketing or not, understanding who you’re targeting and what makes them tick is vital for any successful business.
Therefore, your referral marketing strategy should be built around attracting your ideal target audience.
By understanding what they’re looking for, you can better position your products or services as the solution to their needs.
You can begin this process by creating a robust buyer persona.
In it, you should also aim to identify any common objections they might have so that you can address them head-on.
2. Assign someone to look after your business’s network
Managing your own network may seem like an obvious choice.
If you have the capacity to manage it yourself, then great.
However, when you’re a business owner or MD, a hectic work schedule can result in things like networking falling to the wayside.
If you want to generate sustainable, impactful results, it’s important to remember that referral marketing is a long-term strategy and should be given the attention it deserves.
Assigning someone within your organisation to focus on referral marketing will result in a more streamlined, cohesive process and, ultimately, better ROI.
3. Use technology to your advantage
The theory of Dunbar’s number says that we can only maintain about 150 connections at once. This is a number that often goes out the window when building a business network that you can work with closely, gain referrals from and share referrals with.
Luckily, there are various software solutions to help businesses manage a larger network than what your brain is designed to hold.
Social media-based networking platforms and CRM are among the most popular. But both have their downsides.
Busy newsfeeds and algorithms on social media can mean it’s difficult to make a real impact. Meanwhile, CRM tools in some of the social media platforms can’t effectively track who brings you value.
Plus, the major downfall of managing a large number of connections on a CRM is that the data can quickly become out of date.
What’s a better solution?
For businesses looking for a solution that bridges the gap between networking on social media and traditional CRM systems, Net Hub is the missing link.
This is a new, cutting edge Networking Relationship Management platform. It provides business owners with all the resources to manage, nurture, and track the value of their network.
Using the platform, you can send and receive referrals, join multiple network groups, track your leads, and more.
Want to find out more?
We run a weekly 30-minute demo that takes you through how the platform works and what you can get out of it.
You can book a session that suits you using Eventbrite.