Customer Referrals - Why Are They So Important?

in Marketing

A customer referral happens when one of your customers is happy enough with your product or service to tell somebody else about it. Customer referrals can be indirect, like basic word of mouth advertising, or direct referrals that come in the form of leads and contacts.

For the latter, it is up to you to make the follow-up contact, and this can be the most beneficial form of referral. It's not really cold-calling, as your prospect was probably made aware of the details having been passed on to your business , and advised to expect a call.

With word of mouth referrals, it is up to the customer to contact you; if he or she got your information on the basis of having voiced a problem that you can provide a solution for, the chance of doing business is high, as most people value their friends'/colleagues' input. These customers have both made an effort (contacted you) and have been referred by a close friend, so they will warm to your sales patter and/or diagnosis without much trouble. They are "pre-sold," as is often said.

If you are actively engaging in referral acquisition, you will be building your business in the cheapest way possible. You are spending nothing on marketing, and yet the quality of leads that you will get is sky-high due to having been pre-sold by a friend or family member. That means less wasted time on the phone for sales people, as more people are likely to opt for your service/product on first contact.

Initial skepticism and concern over fraud/safety is diminished for new prospects having been referred. If you are getting a lot of referrals, see why this is; you're doing something right, so scale it as much as you can. If your customers are that enthusiastic about your product, you have planted the seeds for future growth explosion, as referrals are likely to refer again, and so on.

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Bernadette Stevens has 1 articles online

Bernadette loves writing about her passions: kids, business, and well-being. She runs a few websites in her spare time, including the outdoor patio bar furniture and cast aluminum outdoor furniture info pages.

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Customer Referrals - Why Are They So Important?

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This article was published on 2010/03/27