Customer referrals are a powerful way to acquire new customers and grow your business. According to a Nielson.com report, 83% of people trust the recommendations of friends and family, and 66% of people trust opinions from consumers posting online.
Establishing a word of mouth marketing model can be tough though. Getting customers to advocate for your brand takes a lot of work and time to prepare. This guide will help you understand the types of referrals you can use, how to develop customer advocates, and of course, how to (successfully) ask for a referral.
Types of customer referrals
A customer referral can come in through a variety of different ways. Let’s take a look at the different types of referrals you can pursue to help grow your business.
Existing customers referring new customers (direct referrals)
Direct referrals are the most powerful type of advertising a business can achieve. This is when an existing customer has such a great experience with your brand, that they willingly tell their friends and colleagues about it. These types of customer referrals are cost-effective and they start with delivering an exceptional customer experience.
Referrals from user-generated content
It is widely known that consumers trust people more than they trust brands. A survey conducted by Bazaarvoice reports that 84% of millennials say user-generated content influences their buying decisions. Marketers must get creative to influence younger generations who spend time on social media to buy from them. Old-school advertising isn’t enough.
Many companies run hashtag campaigns and photo contests to drive user-generated content which is used to advertise and market their brand. For example, Coca Cola’s #ShareACoke campaign encouraged people to find bottles with names that held a personal meaning to them, then share a drink with a friend or family member and Tweet about their experience using the hashtag.
Referrals from reviews
Review sites like Yelp, TripAdvisor, and Google Reviews remain powerful ways to drive your business forward. However, reviews can also take the form of customer stories. Customer stories (like case studies) take an in-depth look into how a customer found your product or service, why their experience was a positive one, and how they solved a problem to achieve their desired outcome. Reviews and customer stories are great ways for marketers to amplify the positive experience their customers had. This can be done by simply asking, or encouraging customers to write reviews. Long-form customer stories can be written about customers you have a positive relationship with, and it’s always best to ask for approval before writing about a customer’s experience.
Referrals from social media
Chances are a lot of your customers are already on social media. Leveraging social media is a great way to connect with thousands of people. Getting customers to refer you to their social network is like one big direct referral hitting their entire audience in a single share. This is a powerful way to get a customer to advocate for your brand in front of multiple people without asking them to do multiple direct referrals. Here are several examples of social media referral campaigns.
Preparing for referrals
Referrals can come in a variety of forms. Before you pursue a referral, it’s important to prepare so that you have the best chance of success. There are two main things you should do to set your company up for a referral:
The first thing you need to focus on is providing an exceptional customer experience. After all, unsatisfied customers are not likely to refer your company to anyone. A classic example of this is Zappos. They refer to themselves as “a service company that happens to sell shoes”. Delivering an impeccable customer experience is baked into their DNA, and through that they generate thousands of advocates who refer them organically.
Delivering a great customer experience isn’t all that matters. You need to provide value, and you need to continue to provide value throughout the entire customer relationship. Get to know why and how your customers use your product, and continue to evolve your product or service so your customers stick with you as they grow. Share relevant resources with them to help them get more value out of your product or service, and show your customer that you’re thinking about them even when you’re not actively engaged with them.
Asking for customer referrals
Now that we’ve looked at some of the various types of referrals and shared tips for creating an experience your customers will want to refer in the first place, let’s talk about how to ask for a customer referral.
Ask your customers directly
Aside from a voluntary referral (one you get without asking), the easiest way to get a customer referral is to ask. As long as you’ve done a great job, exceeded expectations, and provided value, this shouldn’t come off as “pushy”.
Big tip: don’t use the word “referral” when asking for a referral! Instead, ask if your customer knows anyone else who could use your solution to solve a problem. Or, ask if they know anyone who would be interested in learning about a topic your business can help with.
Focus on successful customers
It’s best to focus your referral efforts on successful customers and customers you have great relationships with. In other words, be deliberate about who you ask. If you’re using NPS or CSAT surveys, identify your most satisfied customers through those responses. Likewise, ask your support, sales, and customer success teams who they feel might be willing to give a referral.
Build meaningful relationships
The more you focus on building relationships, the more likely those customers will be willing to refer you. Continue building great relationships with your customers so you always have a pool of qualified customers you can ask for referrals. Encourage your customer-facing teams to create customer champions and you’ll continue to generate opportunities for new referrals. You can even go as far as making this part of your customer success team’s goals or OKRs.
Your product or service should speak for itself, but everyone loves a gift. Use a small incentive like a gift card or discount to incentivize your customers to give you a referral. You can also give your customers commission for every customer they bring you. Use this as a way to compensate them for their time and effort of giving you a good referral.
Ask for referrals at the right time
Asking for a referral at the right time can help make an already good relationship even better. An example of this is co-marketing with a customer. Perhaps you have a customer who really values your product. Asking them to write a blog about their use case and sharing that blog on your website (or theirs) ultimately benefits both companies and helps strengthen the existing relationship you’ve already worked so hard for.
The opposite is also true! You don’t want to ask for a referral immediately after the customer submitted a support ticket expressing frustration. Be timely with your referral requests.
Create referral marketing materials
Business cards or referral cards are classic examples of referral marketing materials. Include a “referred by” line or include a small snippet about your referral program on your cards. This little nudge reminds your customers that you value a referral if they’re willing to do so.
Recommend a friend functionality on your website
Similar to traditional marketing collateral, build digital solutions for getting new referrals. This might be a special web form on your website, a personalized referral link, or a nudge in your digital invoice system. The key is to make it easy for customers to refer you. Removing the effort to submit a referral will lead to more referrals for your business. Keep in mind, you’ll want to ask for a referral at the right time. Check out tools like ReferralCandy and Friendbuy to help you get started.
Give them a surprise
Under-promise and over-delight. Rewarding your customers with special offers, incentives, or opportunities will create a delightful and surprising experience. This shows your customers you appreciate and value them, and they’ll more likely be willing to refer your business to others.
Personalize the ask
As often as possible, be personal with your request for reviews and referrals. Don’t send a high-paying customer a generic referral request email. This will likely catch them off guard and diminish the existing relationship you have with them. Instead, have the account manager, customer success manager, or sales reach out to the customer to request a referral. Whoever has the best relationship with the customer is likely to get the best response.
However, asking customers directly isn’t always an option, and it’s rarely scalable. To keep the request personal even when sending out a large number of requests, use their name, or any unique dynamic data you have in your CRM.
There are a number of different ways to ask for a customer referral. Asking for a customer referral and getting the answer you want will take some practice. Most importantly, you have to focus on the customer experience. Always aim to exceed expectations. By focusing on delivering an amazing experience, you’ll queue up tons of opportunities to get ongoing referrals.
What’s your biggest challenge in getting referrals? Leave us a comment and we’ll help you achieve your goals!
Need more tips on communicating with customers? Check out our article with 25 magic customer service phrases.