The Social Observer

The Social Media Marketing Blog by SNHU Students

Increase Referral Rates: Small Business

referral rates boost popularity.

Get your friends talking about you.

Become the Talk of the Town!

Growing a small business and your referral rates can seem like a time-consuming and challenging task. It certainly can be without the use of referrals.

Importance of Referral Rates

One of the hardest things to do with a small business is to gain new customers. An easy and cost effective way to do this is to set up a referral system. “A referred prospect is much more likely to be ready to listen to you, trust what you say and ultimately to buy from you. Referrals make your job easier, and help you sell more with less effort and in less time,” (Francis, n/d). The benefits of referrals are they “have no cost, they increase your closing ratio, allow for larger sales, and bread more referrals,” (Wayshak, 2013). But that doesn’t mean referrals just happen; you need to be aware of opportunities to gain referrals when customers give positive feedback. Be aware of when you are invaluable to your customer and stay in touch with your customers over time. Social media is an excellent avenue to facilitate continuous interaction with your customers. Being proactive about gaining referrals is the name of the game. Be sure your customers know you want to be the talk of the town. Converting those referrals into introductions is the next step towards increasing your customer-base and further increasing your referral rate.

Types of Referrals

Referrals often happen when they happen, or do they? You can influence how often your referral sources think about referring your small business with these four types of referrals, (Jantsch, n/d).

Increase referral rates with these 4 types of referrals

Graphic from John Jantsch.

Direct referrals are offers to your existing clients to act, and to create a referral that turns into a client.

Implied referrals are obvious actions of work for someone else, without necessarily asking for a referral. Similar to the attraction brochures at highway visitor centers.

Tangible referrals are just that, tangible, and gives your customer real value to pass on to a friend.

Community referrals are often used to benefit a non-profit or an organization.

Sample Referrals

Ever get referred by a neighbor to a remodeling service, and the company sends you a carpenter for a day to fix projects around your home? That’s a direct referral. Or have you ever received a letter in the mail from a neighbor’s contractor, asking if there are any issues? This is an example of an implied referralTangible referrals are the most popular, for example, your hot tub company sends out a newsletter to its “valued customers” and they receive a coupon for $100 off their next purchase, plus a coupon for a friend to receive $100 off their first purchase. A popular choice for community referrals is having a discount at a local restaurant, sponsored by the high school band. With a coupon or a note to your server, you save 10% off your bill, plus the restaurant will donate 10% of its profits to benefit the high school band. Increase your word of mouth referrals with a social media business card, providing links to your social platforms.

Going Social

Small businesses can gain more than followers on social media. Participating on social media platforms can build loyalty and trust in customers and followers. A great way to build a referral base is by sharing company information on social media platforms. When people engage on social media, they typically share pictures and articles that they make a connection with. Don’t be afraid to connect with your fans on social media; it’s a great place to find referrals.

Increase referral rates with social media

References:

Francis, C. (n/d). EngageSelling.com You Like Me – You Really Like Me! 6 Ways To Increase Referrals and Make More Sales. Retrieved from https://www.engageselling.com/articles/article-six-ways-to-increase-referrals

Jantsch, J. (n/d). DuctTapeMarketing.com 4 Types of Referral Programs Every Business Needs. Retrieved from https://www.ducttapemarketing.com/blog/referral-program-types/

Wayshak, M. (August 16, 2013). Huffington Post. Why Every Business Needs a Referral System. Retrieved from http://www.huffingtonpost.com/marc-wayshak/why-every-business-needs-_b_3767485.html

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Category: Small Biz, Social Media Marketing 201

3 Responses

  1. J says:

    Referrals are def what you need and when you see that graphic about trust factor, it’s clear that it’s a benefit to be fairly transparent authentic about everything you do.

  2. Amy P says:

    Referral’s are SO important so this article is definitely helpful! Especially through Social Media, building relationships with your followers can build an even more solid foundation for your small business.

  3. Zlatko M. says:

    Hi Nic,
    Thank you for this very insight filed article. I especially liked how you differentiated between the different types of referrals. I found this information to be very useful.

    Thank you,
    Zlatko M.

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