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Customer Loyalty, Customer Service, Marketing, Sustainability

4 Ways Your Small Business Benefits from Referrals

As a small business, word of mouth marketing is a reliable and cost-effective way to grow your business. Fortunately, we live in a world where people generally root for and want to see small businesses succeed. And whether it be a face-to-face conversation, text or social media message, word of mouth has a way of circulating quickly. But why is word of mouth so important? Well, it often leads to referrals, and referrals usually equate to more business.

Referrals are generally sent when existing customers feel good about what you’re doing or what you’re providing. If you take the time to develop a good relationship with your customers, it will show because your business will expand naturally. Really, a referral is one of the best compliments a customer can give. Here are some reasons and ways your business will get referrals.

  1. Your customers love you.

Chances are, if your customers love you, they will refer you as well. Most happy customers are and will remain loyal to your business. Customer loyalty is the prerequisite for all referrals. On the other hand, you can bet on the fact that you won’t be referred by someone if they don’t like your business.

So, by providing excellent customer service and products, you are creating satisfied customers. How do you know if your customers are happy with you? Fortunately, there are some pretty clear indicators that point directly to customer love.

  • Customer’s come back time and time again.

Look, customers only come back if they had a good experience. Even when you don’t have coupons and other incentives bringing existing customer back, they will do so if they believe in or like what you’re doing. They will especially continue to support you if you are helping them solve a specific problem or pain point.

  • You have received positive feedback from many of your customers.

Not only do your customers continue to come back to you, they give you great reviews as well. This is a huge win for you. Not only does this mean you’re highly referable, but people who are doing their research on you will be more inclined to choose you as well.

  • You stand for something customers believe in.

You provide a service people need, and your company stands for a set of beliefs that fit what the customers want and believe in as well. If you don’t stand for anything, it may be difficult for a customer to develop a connection with you.

  1. You have a presence online, including social media.

This is one of the most important things you can do if you want to be referable. If you’re online, you are making it so much easier for your business to be shared. Just think about how often people ask for recommendations on social media.

If you do have an online footprint, sharing a link to your site is easy for customers. It also helps give credibility and builds trust for your business. Tools like Facebook Recommendations allow people to find businesses based on their friends’ recommendations. The best part is, if you’re on Facebook or have an online presence, as soon as someone recommends your business, your website or page will populate in the comment.

Why else is it important to be online?

  • You have positive social proof. 

If you’re online and people are talking about you (positively), you have good social proof. What does that mean? It’s when people reflect the behavior of their friends and influencers. Think of Instagrammers who have a ton of followers. They promote a product or are seen using a product, and that influences all their followers to use those same products.

  • You’re where your customers are.

Just another added benefit of being online is that you are where your customers are. Making it incredibly easy for them to talk about you. Again, think about Facebook Recommendations.

  1. You have great reviews and respond back in a reasonable amount of time.

To put a cherry on top, you have great reviews online. This further increases your brand’s trustworthiness. Most consumers trust online reviews as much as a personal recommendation, even if they’re from complete strangers.

Simply put: People do their research. This can be true, even if a friend may personally refer them to a business. So, while your listing sites prove many people like you, it also further encourages a referral to happen and a new customer to emerge.

  • You put unhappy customers to rest.

It’s not always about making sure all your reviews are positive. It’s also about showing future customers that you care about all feedback, even less than stellar comments. A prospective customer likes to see that you’re willing to make things right, even with an unhappy customer.

  1. You’re running a referral program.

Although there are no guarantees, this one may be obvious. However, very true. If you are running a referral campaign, you’re likely going to get referrals. Even if your referral program fluctuates in engagement, meaning you have high engagement and then low engagement, and so on, you will get referrals. This is especially the case when the referral program is promoted properly.

Running a referral program doesn’t just make it easy for the customers. It provides the business an easy way to ask customers to refer – and determining how to ask for referrals can be the trickiest part of getting referrals.

Because referral programs are set up to entice customers to want to refer, it, in turn, usually works to help businesses get referrals.

  • Customers are incentivized to refer.

One reason you’ll get referrals while running a referral program is that customers are typically incentivized to refer. There is an additional benefit on top of loving your business. Usually, it’s the incentive that keeps the customer referring.

  • It’s easy for customers to share.

Many referral programs make it particularly easy to share, especially if referral marketing software is involved. Usually, the referral software provides users with social media sharing options and email sharing options. On top of that, most of the messages are already pre-filled by the business, so all the customer has to do is share the posts. When things are made simple and easy, people are more inclined to participate – hence your small business will get more referrals.

If your business already has a lot of happy customers, you’ll likely get organic referrals anyway. Chances are, if this is the case, you may be ready to implement an official referral program. If so, utilizing a referral program software may just be your next step.

Megan Mosley is the marketing specialist at Referral Rock. We believe every business has the potential to increase their word of mouth with referral marketing. Visit us at Referral Rock to see how we can help you build your referral program.

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