Why You Need A Referral Program Asap

Welcome to episode seven. I am so excited today because I get to chat to you about something that I am really passionate about when it comes to marketing your business. If you've been listening to previous episodes of the podcast, you'll know that I am not anti social media, I think social media serves its place, but I think we've put it on too much of a pedestal when it comes to getting new clients for our business. So today I want us to take it old school, like when you have the shop in the village and the only way people found out about you was that their friends told them. Now that may seem like a very analog solution, but there are a lot of lessons we can learn there. I wanted to chat about how this shows up for us in the online world. So the reason referral marketing works so well for us is that the biggest part about customer journey is often that know, like, and trust build. Once people have become aware of us, they check out are we for them. And then they asked, do I trust you? And if you have been referred to them by somebody that they trust, you have that trust already by proxy so you get to leapfrog over a huge part of your customer journey. Moving quicker into the “Am I ready to buy?”, “Is the price appropriate?”, “Let's have a quick chat about whether I can do this” stages. I was reading an article recently and they were dropping some stats from a Nielsen study around referral marketing and I really wanted to bring these to you because I think they show the power, in a way that you might not have experienced because we're being told all the time by bro marketers, that all you need is a bit of social media and ad or two and a funnel. When in reality, you have a powerful tool that you're maybe not using right now. When people are referred to you by a friend, they're 4 times more likely to make a purchase. So you need less leads. They spend about 15% more money and they have a nearly 40% retention rate. Now, the reason that one's important is we know from a variety of studies across industries, that it can cost anything from five to 25 times more to get a new customer than to retain a current customer. So if people are staying with you more, you are saving money in terms of costs. And if you're in a B2B space, they will convert nearly 70% faster than a cold lead because, as we said, you're missing that whole know, like, and trust build stage. This is nothing new, right? This is what the village shop was doing back in the day. So why aren't we doing it? I want you to think about your possible referral marketing in two different camps, number one, your clients, and number two, your network. If we look at your clients, most of your clients are probably very happy to refer you to somebody if you've given them a great experience. So what if we took some of this time that we're spending shouting out and performing on social media and pulled that back into giving our clients an incredible customer journey so that when they got to the end, they wanted to shout about you from the rooftops? This should just be a natural part of the flow. They worked with you. They've had an amazing experience. You're probably asking for a testimonial. (If you aren't, you really should be as part of their off-boarding or as they transition from one product to another) but at that same time, you should be dropping them the question, “Do you know anyone else who might be a great fit for this product or service?” The reason I see people are nervous to ask for referrals from their network is they haven't been showing up and adding value to that person on the regular. So you feeling a little bit like you, haven't spoken to someone for six months and now are going to pop into their inbox and ask them to help you move house. So what you want to be doing with your network, especially people who are connected to your wider audience, maybe they offer a parallel service or maybe they provide the service people need before they need yours, you want to think about who those people are and do a couple of things. Number one, stay in touch with them. The only reason that you are going to get a referral is if you are top of mind when somebody tells them they're looking for something. The only way to stay top of mind is to be in regular touch with someone. And there are so many easy ways to do this now with social media that it doesn't need to be like a sales pitch or a formal email every time. It can be a comment on their Instagram story or a quick DM to congratulate them on their Reel. It's showing up as a human like you would for your friends. Second, they need to be comfortable that if they send someone to you, that person is going to be treated really well and that they're going to get amazing results because they're putting their reputation behind you in that recommendation. They probably also need to know what's in it for them. Are you prepared to do referrals back to them? Are you prepared to pay them a commission? Will they get to spend time with you? It doesn't have to just be this relationship where it's all about them sending you stuff. It can be about how are you going to add value back to them in building in this relationship. So the key here for either of these referral groups is to make things really easy, both for yourself and for them, make sure they know how to do a referral, make sure they know what service they're making a referral for and what its big promise is. Make sure they know what kind of person you are looking for. For your clients, that's easier because they're going to look for people like them to have a similar experience. For your network, that needs to be a lot clearer. Otherwise, you're going to land up having a lot of discovery calls with people that don't lead anywhere and both sides are going to get frustrated. If you have ease and clarity built into your referral marketing, you get to have all of those results: 4 times more likely to buy, spend 16% more with you, a 37% higher retention rate. Those combined means more profit for you with less effort. And isn't that what we're all chasing?