Recently I did an article on growth hacking. I emphasised on how referrals are pivotal in driving business growth. In this article, I want to exclusively discuss referrals. Their importance to the growth of any business cannot be overemphasised. What is a referral anyways? A referral can be either of two things namely, the process of telling someone about the efficacy of a product or brand with the thrust of recommending them to buy it. Secondly, a referral can refer to the person referred or basically the actual referral process. Let us look at the dynamics of referrals in business.
How Should You Do Referrals For Your Business
Possibilities Are Infinite
There is an infinite number of ways in which you can do referrals. You just have to check out how other companies or businesses have done it to see what I am talking about. You have to encourage customers to refer to others so that they become customers. For instance, you can come up with a raffle draw for scenarios when customers refer to others. Here is what you can do; you can come up with a system where when someone makes a referral, they get a ticket to enter the raffle draw. This means the more they refer the more their chances of winning. You can even take it up a notch to say that when a referral culminates in a sale then the referrer gets more tickets. I used that atypical example to show you that you can come up with any type of referral program.
Must Be Seamless And Hassle-Free
There are things you must closely pay attention to when doing referrals though. Firstly, the process of making a referral must be seamless and hassle-free. The moment the process seems so demanding then one easily loses interest in making referrals.
Be Honest – Do Not Deceive Or Manipulate
Secondly, be honest from the onset – desist from plot twists. What I mean is that do not lie and blindsight people in such a way that they come across more conditions along the way. Let me give an example; you can find a referral program where you are promised something if you prefer, say, 5 new customers. Then when you get to the 5 customers you are met with some other pre-condition e.g. refer 5 more to elevate your reward to a certain level. Meanwhile, at that point, you will not be able to redeem the previously promised reward. That is pure manipulation and it might turn out badly for your business.
Do Not Be Too Insistent
The other thing is that you must not be too insistent or even indirectly encouraging customers to be too insistent. If a referral program requires one to be aggressively insistent to get referrals then it is a tell-tale sign that the program is flawed somehow. A good referral framework is seen in how easy it is to get people referred without being too insistent.
Why Should You Do Referrals
You are probably wondering about whether or not to do referrals. Some of you might not be wondering but all the same, I will take some time to explain why you should do referrals.
Tried And Tested
Referrals are tried and tested; in fact, most of the global businesses you know came to be what they are because of referrals. Surveys have shown that well over 75 per cent of businesses say that referrals are so pivotal to business growth. Over 60 per cent of entrepreneurs that use referrals in their marketing strategies attest to how referrals surge the likelihood of high volume sales.
What is social proof? Well, social proofs are the basis upon which people make decisions by what others are doing. In essence, social proofs indicate that people will do things confidently if others are doing them and recommending them. Referrals are the hallmark of this social proofs aspect because one ends up doing something (i.e. making a purchase). After all, others did or are doing the same. It is said prospective customers are more than 90 per cent more likely to make a purchase recommended by others who have bought or used a particular service or product. Actually, prospective customers have increasingly grown sceptical of reviews given by the business in question. They trust social proofs way more. All this clearly shows you why you must cultivate referrals for your business.
Referrals are one of the most low-cost strategies to grow one’s business. Even studies have shown that over half of businesses say it is the cheapest way to generate leads and subsequently sales. On referrals, you are mainly banking on customers’ satisfaction in using a particular product or service. If that happens they can even refer customers without any expectation of a reward from you. Typically people talk about their brand experiences which if good end up being referrals. Even when you deliberately come up with a referral program it can always be low-cost yet effective.
If you have not yet started a referral program for your business I wonder what you are waiting for. Any business can do this and the possibilities are infinite like I said. Exercise caution to not end up rolling out a pyramid scheme (either aware or unaware). People shun pyramid schemes and if they see it is you will suffer greatly. It is pertinent that your referral program not even resembles a pyramid scheme in any way. It must be sustainable and well-oiled for as long as your business lives.