Marketing Masterclass – 3 reasons you need a referrals strategy (plus 5 ways to increase your referrals)
Why referrals form an important part of business growth
Think a referrals program is not worth the time and effort? You might reconsider after reading this. Here we highlight just 3 reasons why a solid referrals program works as a critical tool for steady business growth.
Ready to welcome in new clients with a referrals program? Check out our 5 Strategies for Increasing Client Referrals to get started.
It covers all bases
A referrals program takes a two-tiered approach to your growth and expansion efforts, effectively ‘killing two birds with one stone’ when carried out successfully. Not only does a referrals program work to retain and grow your existing loyal customer base (where the bulk of your revenue comes from), it also works to draw in new clients. These clients form a wider cross-section of individuals who probably would not have heard about you if it weren’t for your referrals program (and your lovely loyal clients!).
It is cheap (and effective!) advertising
Once a referrals plan is in place, your customers essentially do all the work for you, so not only is it a great time-saving marketing strategy, it is also economical. Usually with a referral program, an incentive is offered to both the existing customer and the potential new customer. When you think about how this strategy instantly doubles your booking rates, your business still comes out on top — even after the treatment discounts or complimentary upgrades are applied.
Referred customers are the best customers!
Another reason to get behind a referrals program is because the referred customers you acquire may well turn out to be your best and most loyal customers yet. A study conducted by Goethe University revealed that customers referred by other customers spend more, are more loyal, and provide a higher customer lifetime value. These referred customers also tend to go on and refer more new customers themselves, so the cycle of growth and expansion just keeps evolving.