Business Tips

Customer referral tips for small businesses

People trust that the people close to them will give good recommendations and they actually act on those recommendations. There’s big potential in this for businesses like yours. According to recent studies, referred customers are more loyal and have a 16% higher lifetime value. So, how do you motivate customers to spread the word and refer you to their network?

Benefits of getting customer referrals

Perhaps the most obvious (and impactful) benefit of getting customer referrals is that it helps get your name out there and grow your potential customer base. A larger customer base means more opportunities for business and for growth. Referrals are some of the best free advertising that you can get.

Additionally, when your current customers refer their people to your business, it’s an excellent opportunity to build relationships with both groups. Asking your current customers for referrals shows that you value them and their opinions, which can help bolster your relationship. As for any new customers that get referred, you will already have a solid foundation to build a relationship on because they came to you at the recommendation of someone they trust.

Tips for getting customer referrals

The key to getting more referrals is asking the right people at the right time. Here are a few things that you can do to start getting a steady stream of referrals from your existing customers.

  • Provide excellent customer service
    The first obvious step to getting more referrals is providing top-notch service that people can’t help but want to tell others about! In the near future, Sideline will have a new generation of communication tools that will help you automate and simplify customer service tasks.
  • Don’t delay
    Ask people for a referral right after they’ve had a positive experience with your business. Do it while you’re fresh in people’s minds. Most people would be more than willing to share a positive experience others if you ask them. You can do this in person at the end of a transaction, or send them a follow-up message.
  • Be selective
    Don’t worry about asking every single customer. Focus on your best customers who will be most likely to refer you. Ask people whose social networks include other potential customers. For example, if you own a bakery that specializes in children’s birthday cakes, ask for referrals from customers who you know are friends with other parents.
  • Create a referral program
    Of course, people are more willing to do something nice for others if they also benefit from it. That’s where referral programs come into play. There are a variety of program structures that you can implement, including:

    • A reward for everyone – Both the person doing the referring and the person being referred get a reward, like 20% of their next purchase.
    • A drawing – For each person they refer, customers earn one chance to be entered into a drawing for a large prize. The more people they refer, the more opportunities they have to win.
    • A point-based system – Customers earn points that they can redeem for coupons or free stuff based on the number of people they refer.
  • Make it easy
    People are more likely to refer others if it’s simple and convenient for them to do so. One way of making things easier (and increasing your odds) is giving customers something they can pass along to others. It can be something physical like a business card or printed coupon. Or provide something that can be digitally distributed like a text, email, or direct message on a social channel. In the message, include a website link or coupon code for customers to pass along.
  • Use social media
    Social channels are an easy way for you to ask for customer referrals and for people to let their friends and family know about you. Use posts and links that are easy for people to share with a larger network of friends.
  • Say thank you
    It sounds basic, but a simple thank you really matters. Be sure to thank the customers who have given you referrals, whether it’s via text, email, or in person. If they feel appreciated and valued, they will be more likely to continue sending business your way.

Asking existing customers to refer others to your business is not only a great way of growing your business, it can also help you expand your social network and build relationships with current and future customers.

To learn more about Sideline’s features and how they can make your life easier and grow your business, take a look at some of the blog posts listed below.
Header Image: Geber86 via iStock