Referral marketing is the process of using marketing dollars to generate new business via referrals from current and happy clients.
Referral marketing many times can be an excellent way to invest marketing dollars because these clients are generally of higher quality than clients from a cold source.
There are many reasons referral marketing campaigns fail and this article will discuss two reasons so you can avoid in referral marketing systems.
First, most referral marketing needs to be active referral marketing, and not passive referral marketing. Active referral marketing is when you are actively involved in generating referrals and are continually sending our referral marketing programs. Passive referral marketing generally happens be accident and is not a true system.
Now that we have discussed the two different types of referral marketing — both passive and actives lets address some specific details that need to be in play your referral marketing to work.
First, you need to make sure that you are speaking and marketing to a current client when they are most likely to give you referrals. Some people call this peak referral tate, and some people call it just referral state. When is this state? When people are most happy and satisfied with your product or service. Here’s a quick example. Let’s say you wash windows and the client remarks how clean the windows look–that is the exact time you should ask them for a referral.
Let’s say you own a catering company and they client remarks how good the food and service is…that is another time to ask!
Now sometimes the client will be in a referral state later–for example if you are treating them for back pain or helping them as a personal trainer to lose weight or get into shape. If a person is bent over huffing for air and trying to catch their breath and their muscles are in pain–now is probably not the time to ask them for a referral or for them to receive your referral marketing. However, if a couple of weeks down you show the client a before and after picture of weight loss, THEN that is the time to ask the person because the person is in good referral state.
This leads to another big referral marketing mistake. Not staying the course. If you look at referral marketing like farming it takes time to nurture people to give you referrals. People aren’t always ready to refer now–they truly might not be ready or might not know of someone who can use your product or service. So if you deploy an active referral marketing system and it continues to generate referrals that will overcome your personal shortcomings in not staying the course!