What is the one thing that most business owners say is their best source of new business?
It is word-of-mouth referrals! But are you leveraging this for your business and do you know how to make it really work its butt off for you? It is easier than you think to master the art of referrals (even if you are super shy or not comfortable asking for them).
Word-of-mouth marketing is right up there. Word-of-mouth influences as much as 90% of purchases, it’s 10x more effective than traditional advertising, yet fewer than 1% of businesses have a defined plan for it.
So, we know word-of-mouth works, but most businesses don’t actively plan for it. Why is that? In part, because we see word-of-mouth as organic – for example, two people talking about your business at a coffee shop. It’s happening outside of your business (so some think it’s outside of our control) and it can be tricky to plan for and predict.
According to David Smerdon, founder of Referral Formula, the pinnacle of word-of-mouth marketing is REFERRALS. Where your business has solved a problem for an existing client, and they had such a great experience they spot a similar problem to be solved for a friend or family member and directly introduce them to your business.
Why are referrals so powerful?
- The power of the referral is the trust relationship between your client and their friend or family member. A referral is a direct, personal endorsement of your business.
- The cost to acquire a new client is often less via direct referrals than traditional paid lead generation.
- You can target clients that have shared values with your business (their friends and family will often be like-minded). I want more clients like I already have.
- Referred prospects convert quickly, and a study from Extole suggested they generate 16% more profits.
- Referred customers can also be more loyal and Referrals are easily tracked.
The biggest referral advantage is you as a business owner is focusing on delighting your existing clients (so they become referrers or super referrers).
I interviewed David Smerdon from Referral Formula in an episode of Sales Without Socials Podcast and he shares his awesome 6-Step Formula for getting more referrals (even if you are super shy and not at all comfortable with asking for them).