A number of recent studies found that 92 percent of consumers trust the referrals they receive from people close to them.
Whether you run a local shop or an online startup, finding a way to attract new customers is vital to your growth. One of the best ways to drum up more interest in your products and services is by offering rewards to customers for their referrals.
For most business owners, figuring out how to start a referral program seems like a daunting task. In reality, establishing one of these programs is a lot easier than you think.
Read below to find out why establishing a referral program may be one of the best things you have ever done as a business owner.
Referral Programs Are Viral By Nature
When referral programs are created and are easy to share online, they have the potential of going viral. This means you can reach a larger audience and increase your customer base with ease.
If a customer shares the referral program you have instituted online, all of their followers will see it. Usually, this can create a domino effect that will lead to your business getting a lot of attention. The key to making your referral program share worthy is offering incentives people will be interested in.
Create a Loyal Customer Base
Having a referral program in place is also a great way to incentivize shopping with your company. Most customers will be fiercely loyal to a company that engages and rewards them.
If you provide customers with a reason to come back and continually shop with your business, they most likely will. When these same customers refer your business to friends and family, it means they genuinely support your brand and the goods or services you provide.
A study conducted by the Wharton School of Business found that customers who are referred by friends and family members 18 percent more likely to remain loyal to a business. This statistic alone should be enough to motivate you to take action and establish a referral program.
Create Better Relationships With Your Audience
Humanizing your company is a great way to attract new customers and keep them interested in what you are doing. An engaged customer is generally a happy customer, which is why the investing time to create a referral program is essential.
People who participate in your referral program are engaging with your business on an entirely different level. They generally feel like they are a part of your team when recommending your services and products to those close to them.
Allowing your customers to feel like they are a part of your success is paramount to keeping them happy and content. Not only will this keep them engaged, it will help you keep them loyal for years to come.
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A Cost-Effective Marketing Method
When you think about the cost of other marketing methods, a referral program is quite affordable. Marketing to the general public will take a lot of time and money because you are casting a wider net. With a referral program, you are basically marketing to people who are already using your products or services. Not only does this increase the success rate of this form of marketing, it saves you a lot of money in the process.
Are you not sure how to properly institute a referral program for your business? Consulting with professionals who have experience with these programs is a great way to get in-depth guidance during the creation of your referral model.