Sales Referrals: An Old School Solution for New Business Opportunities

It goes without saying that all companies should be open to fielding customer complaints. But, how many are actually ready to deal with them? That question goes for positive feedback, too. What do you do with the compliments your products or services receive? Do your customer service agents simply utter a polite “Thank you,” and hang up to take the next call? Or, do you leverage these great customer experiences by turning happy customers into tangible sales referrals?  

Good or bad, people love to share their experiences. We’ve all heard the adage that it only takes one negative experience for a customer to switch to a competitor. This simple truth is enough to keep companies on their toes and ready to pivot on a dime. But, what about the fact that for every negative review, that same company can expect three or four positive reviews as well? It begs the question: are your positive reviews generating sales referrals from friends and family of happy customers? The answer to that should be a resounding ‘Yes’ every time.

So what if sales referrals are seen as old-school sales techniques? The best endorsers for your products aren’t celebrities or review channels. Happy customers are more likely to share their positive experiences with friends and families. In addition, ServiceDirect’s 2022 Consumer Survey reported that 71% of customers will gladly leave a positive review if a company asked them. It also helped if the company made it easy for them to post a review. If you’re fortunate enough to have such goodwill from your customers, you should capitalize on it by generating sales referrals.

What are Sales Referrals?

What are sales referrals, you ask? They’re a lead-generating activity that seeks to leverage your brand’s good standing with a customer. As posited earlier, satisfied customers are more likely to recommend your brand to their circle. After all, Kantar confirmed that 93% of people trust friends and family when it comes to brand and service information matters.  

Leveraging this goodwill and generating leads from it is what we call referral marketing. Whenever your customers recommend your brand to their friends and family, that’s referral marketing. Just don’t make the fatal assumption that being referred to means you don’t have to put in the work. The best part about sales referrals is that they usually result in high-quality leads that can help boost your business.

Is Affiliate Marketing the Same as Referral Marketing?

It’s understandable when people often confuse affiliate marketing with referral marketing. After all, both deal with generating leads and getting new customers from somebody endorsing your business.  However, affiliate marketing involves an arrangement with a third-party endorser who receives a fee for bringing in paying clients.

In contrast, referral marketing is an honest-to-goodness initiative by actual customers to endorse the brand to their family and friends. While rewards often accompany these referrals, customers are not under any obligation to do so.  

Customer Reviews are the Best Reviews

How do companies take advantage of their happy customers’ goodwill? By asking them to post personal reviews that endorse the brand. In a 2018 PowerReviews white paper entitled “The Growing Power of Reviews,” the company acknowledged that nearly all consumers (97%) base their purchasing decision on ratings and reviews. An additional 85% percent also check for negative reviews on a brand before they consider it for purchase.

This is why businesses should collect reviews and make them more visible to the public. However, you probably should go outside your website or social channels for this. Otherwise, you might miss out on potential leads outside your customer base.

Still, the best reviews are unprompted reviews. An ultra-satisfied customer will write to you without even being asked. Apart from expressing your gratitude for the compliment, you should also ask their permission to publish their rave reviews for all to see. Offering a token of appreciation—like a complimentary gift, free upgrade or discount on the next purchase—will go a long way. Alternatively, you can encourage customers to write their reviews through your regular emails, newsletters or small ads on your social channels or customer service pages.  

Why Do Customers Read Online Reviews?

For many would-be buyers, the best source of information about a product or a brand is the users themselves. They believe that people with similar wants and situations as themselves can offer the most accurate take on products and services they are considering. They know that if the product succeeds in helping people with similar problems, they can get the help they need as well.

Many buyers consider online reviews from fellow customers to be as legitimate as personal recommendations. Many consumers will even ignore a few negatives if they’re outnumbered by tons of positive ones. In that same breath, though, what does scare customers is a lack of reviews altogether.  

Not surprisingly, most people look at Google for reviews. According to BrightLocal, the search engine giant reported improvements in consumer engagement in 2022 versus its rivals Yelp and Facebook. In 2021, 81% of users looking for reviews turned to Google. A year later, that figure jumped to 87%. Meanwhile, the number of people who depended on Yelp went down from 53% in 2021 to 48% a year later. For Facebook, the numbers plummeted from 54% in 2020 to 48% in 2021 and 46%  in 2022. The cause for the decline is different for each platform. Yelp’s drop in review seekers is due to a growing perception of bias and unreliability. Meanwhile, Facebook is getting heat for the proliferation of fake reviews, which are turning droves of users away from the platform altogether.

8 Tips for Creating a Successful Sales Referral Strategy

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Sales referrals are an integral part of growing any business. Despite their old-school charm, there are few alternative ways to generate the kind of leads that word-of-mouth marketing can generate. While customer reviews remain the best way to generate sales referrals, you’ll need to do more to convert these referrals into actual customers. Here are eight ways to enhance your sales referral strategy:

1. Identify your Ideal Customer

Knowing who your customers are is the first step in developing a great sales referral program. Before embarking on any referral marketing program, it pays to answer a few questions that help identify your ideal customer. These questions include identifying the various demographics your customers belong to.  In addition, you should be able to identify the reasons customers choose you over your competitors. Finally, you should also be able to identify what attributes customers like about the brand.  

Knowing your target customers can help you tailor your referral marketing programs. This will ultimately better encourage them to communicate their likes for the brand. Will an incentive convince them to write a review? The type of incentive will depend on what appeals to your ideal customers. For some customers, a successful referral is a reward in and of itself. For others, a token of appreciation or an exclusive privilege are both great incentives.  

2. Build Relationships with Existing Customers

Don’t expect your entire customer base to participate in your sales referral program. Not everybody will want to post a review, and not everybody will want to refer friends or family. It’s best to start with the segment of your customer base that is responsive to your sales referral strategy. These usually consist of core customers who’s been with you for a while and who regularly communicate with your representatives. More importantly, they have a very positive response to your product or service and aren’t shy to express their love for your brand.

Tailoring the sales referral program to these target customers can help a lot. They are the ones who will most likely respond positively to your overtures. They’ll also be more enthusiastic about promoting your brand to others.

3. Think Outside the Normal Referral Box

Expectedly, sales referrals will almost always go toward endorsing the brand to family members and friends. However, sales referral programs can target other potential customers outside of this qualification.

Outside of friends and family, other individuals or groups that you can consider include the following:

  • Employees or co-workers
  • Community or church members
  • Trade industry or special interest groups
  • Competitor’s customers

Marketing to these specific groups requires unique skills to identify and align their needs with the brand’s solutions. As long as your brand can help fill their needs, your brand should pay mind to these groups.

4. Create a Referral Program

If the reviews are overwhelmingly positive and you’ve barely scratched your market’s surface, then it’s time to look for more customers. A referral program won’t have to depend entirely on your existing customers’ goodwill to generate leads. Instead, creating a referral program that incentivizes active participants can be a great way to swell your ranks.

Providing an incentive is key to the referral program’s success. Issuing a reward for merely showing up will create its intended effect: people will sign up and do nothing more.  Instead, fine-tune your program to give more rewards to more active members. For example, you might want to start y rewarding members their first reward after a first successful referral. Then, offer more rewards or prizes to individuals who manage to attract more customers. In many cases, providing rewards to both the endorser and the recruit might make them more cooperative and supportive of the referral program.  

5. Leverage Social Media

Social media channels are a great way to extend your range. Opening comments and allowing review posts on your social media pages give your customers platforms to share their love for the brand. At the same time, it also allows leads to gather feedback about the brand, which can ultimately convert them to customer status.

In addition, you might want to consider creating a referral section where customers can submit or nominate leads from their network of friends and family members. This can potentially turn into a great lead-generation source where customers can easily make referrals.  

6. Partner with complementary businesses

Looking for partners for your referral programs means joining non-competing groups targeting the same market. The key is the non-compete status, as this means that both parties can share customers and address their different needs together. For example, paper suppliers might find partnering with printer manufacturers or art supply companies beneficial. In most cases, the customer can find value in what you and your partner company are offering.

Partnering with other companies can also help expand your market reach. Using the same example, getting referrals for other industry-specific markets can unlock your potential in a previously-untapped sector. Your art supply partner can now also promote their wares to an entirely new market segment.    

7. Follow up with Leads and Customers

Asking your high-quality leads and loyal customers to post reviews about your brand or product is a low-risk, high-reward scenario if you managed to maintain a positive relationship with them. Your work should speak for itself, but your customers will be the ones doing the talking. If you’ve managed to sell them a great product that they’re happy with—and then back it up with impeccable customer service—asking them to write a review shouldn’t be a problem. Of course, be sure to ask nicely and follow up.  

8. Measure your Results

Using automated software isn’t just a game changer in terms of tracking referrals, monitoring campaigns, and managing endorsers and rewards programs. It also means having the tools to automatically measure the results of your campaigns. Monitoring and measuring tools allow you to see the areas where you did well and where you fared badly. It can also tell you if you went over budget and are now paying top dollar for low results. Finally, measuring results can also give your organization a better idea overall of how to fine-tune your referral program. Better performance leads to better results without breaking the bank.  

Ingage Helps Engage Clients Into Making Sales Referrals

Sales referrals will always remain a great lead and income-generating strategy. It helps to build on the goodwill of customers by incentivizing them to refer the business to others. Most people would rather listen to a personal recommendation versus a ringing endorsement from an influencer anyway.

Ingage is cloud-based, online interactive presentation software that can help you bring life to your sales referral programs. Its highly interactive features mean better presentations, which in turn prompt more engagement and excitement for customers. In this case, creating a referral program presentation complete with a rewards system is easy using Ingage. Even better, you can collaborate with your entire team when developing an Ingage presentation, which means everybody remains aligned on everything else. Easy share features and powerful analytics round out the software’s major features.

Find out more about how Ingage can help develop your sales referral program and other documents. We’ll also be happy to arrange a free demo for you to see how Ingage can take your sales referral game to new heights.

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