How do you recognize a healthy business when you see one? One sign is a growing source of new customers. Some businesses turn to advertising campaigns to acquire new ones. But one source that is often overlooked is a referral from your current customers. Tap into this resource by considering whether a referral-marketing program is right for your small business.
Referral marketing (also known as word-of-mouth marketing) has a built-in trust factor that makes it effective. Since the information is coming from someone other than you, it tends to have more credibility. In fact, one study ranks it as the most influential form of earned advertising.
And social media is making it even easier. Now your customers can instantly share their experiences about your company with all of their friends on sites like Facebook.
Referral programs can be as simple or complex as you want to make them. But many have these elements in common:
Referral-marketing programs can be an effective way to acquire new customers. Consider these elements to determine if it makes sense for your small business.