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Why You Must Have a Referral Strategy

Writer's picture: John ParsonsJohn Parsons

YGTMedia Blog - Referral Strategy

Strong customer referrals are one of the best ways to get more business, as a whopping 84% of people trust recommendations from people they know. According to a study from the University of Pennsylvania’s Wharton School of Business, clients who come from referrals have an average lifetime value that is 16% higher than customers who come from alternative channels.


After all, when someone comes in as a referral, much of the hard work has already been done. Someone else, probably a happy customer, has already provided you with credibility and a sense of trust, both of which are needed for creating a sale.


It’s clear that referrals have played a huge part in the success of your business and should play an even bigger part moving forward. However, for this to happen you need to improve your customer support experience.


Obviously, customer service plays a major role in every business. People like to be heard and they like their problems to be solved. One of the best ways you can encourage referrals is to provide the best customer support.


Businesses need to focus on the following core areas to increase the likelihood of more referrals:


Be responsive –

Make sure you stay on top of things. Don’t let customers comments and questions go unanswered for too long. Stay aware of what’s coming in and what’s going out in response. If you show a little flexibility and sympathy, customers will be more understanding when there are issues.


Be sincere –

The sincerer you are, the better chance you have in making the customer happy. The tone you use, and the way you act towards a customer, can either make or break their experience. If you’re too pushy, you may come off as being insincere. You need to find the balance, be respectful, and be helpful.


Be consistent –

You need to create repeatable processes so that all customers are getting equal attention. Set some standards for customer interactions.


Build relationships, as people refer people -

Undoubtedly, people refer people and not necessarily the business. That’s why it’s essential to build relationships with your customers. This is especially important if you’re dealing with your customers on a one-on-one basis. You need to make sure you’re doing a good job of listening to your customer and making them feel comfortable.


Personalise your interactions as much as you can -

The more you can personalise the experience for your customer, the happier they’ll be. Whether that’s remembering information about them, reminding them of something important or sending them a well-timed promotion.


Don’t be afraid to ask -

Even though referrals often happen naturally, it can be difficult to get people to think about you after they leave the business. That’s why you should always ask for a referral. In general, customers are usually happiest post-purchase, so this is a good time to ask for referrals.


Show appreciation to those that refer you -

Obviously, everyone wants to be appreciated. But it is particularly important to show appreciation to those who send more customers your way. If someone refers you, not only are they giving you a compliment, but they are going out of their way to help you.


It’s building these types of deep connections that will keep you connected with your target market. This strategy will ensure that referrals will keep coming in if you spend time, effort, and engagement with your customers. This referral program will enable you to reap the benefits of one of the lowest cost-per-acquisition marketing methods available to you.

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