What is referral marketing?

Referral marketing is a marketing tactic that makes use of recommendations and word of mouth to grow a business’s customer base through the networks of its existing customers. Referral marketing can take many forms, but at its heart, it’s a way to get your biggest fans to help spread the word about your brand. In other words, referral marketing turns your current customers into brand advocates.

Why do you need it?

Let’s talk about why you need to. How much of a difference do referrals make? Consider this:

• A word-of-mouth impression drives at least 5x more sales than a paid impression.
• Customers acquired through word-of-mouth spend 2x more and make 2x as many referrals themselves.
• Referred leads convert 30% better and have a 16% higher lifetime value than leads acquired via other channels.

Word-of-mouth, affiliate marketing, and referral marketing are cost-effective, powerful, and trusted. When we have a good experience with a brand, product, or service, we’re happy to—and frequently do—share it with others.

How To Earn Referrals in Social Media

#1 Give Great Customer Service.

People will refer others to you when they feel valued and appreciated. So make sure you provide excellent customer service. This means being friendly, helpful, courteous, and professional. It also means making sure your customers are satisfied with the products and services you provide.

#2 Be A Good Listener.

One of the easiest ways to earn referrals is by being a good listener. People will appreciate when you listen to them and ask questions. This shows that you care about what they have to say. It also demonstrates that you respect their opinions and ideas.

#3 Ask for help.

You wouldn’t ask your boss for a raise right after you missed the mark on your monthly metrics, which is precisely why it wouldn’t be appropriate to request a referral when you’re under-delivering on what you promised a customer. The best referrals come about after the customer has had an opportunity to experience the value that you’re capable of delivering.

Then, consider pairing referral requests with positive customer experiences. If you just delivered the news that your product or service helped them increase monthly revenue, ask away.

#4 Join Groups That Are Related to Your Niche. And Comment!

Joining groups related to your niche will help you stay up to date with industry trends and news. This will also give you access to people who might be interested in what you do.

Also, make sure you comment and post frequently. If you comment on blogs and forums, you’ll build relationships with other bloggers and forum members. They’ll see your name pop up when they search for topics related to your niche. And because you’ve commented on their blog or forum, they’ll think highly of you and be more likely to share your content.

#5 Create Shareable Experiences.

If you do want your customers to make referrals, give them a reason to talk about your company. As you approach your day-to-day, you must constantly be innovating in the area of customer experience. Not only do you want to delight them, but you want to delight them in a way that will put you top of mind.

#6 Leverage the power of influencers.

We know that people trust recommendations from friends, and that they’re relatively skeptical of celebrity endorsements. It turns out that people also trust ‘ordinary’ influencers who do reviews, as long as they’ve built up credibility. Some companies even partner with complementary businesses to cross-promote to each other’s customer bases. This strategy involves each business offering discounts or other incentives to customers from the referring company, typically in exchange for a percentage of sales from the referred business.

#7 Offer Freebies.

Another way to earn referrals is by offering freebies. If you offer something for free, people will appreciate it more than if you charge them money.

If you want to sweeten the deal and make sure your customers actually scour their networks for a good referral, offer them something valuable in return. Whether it’s a Starbucks or Amazon gift card, a free month’s subscription, or cold hard cash, give something back to your customers for connecting you with warm leads — they deserve it. They’ll tell their friends and family about it, and those people will potentially become your new clients.