The business of marketing referrals

Finding new customers can be a very challenging process for a small business owner. One way to make money and acquire great new contacts for your business is by talking to your existing customers and getting them to provide you with names of people. Since your existing customers already have interest in your company they will be able to do a lot of the marketing for you because their friends and loved ones already trust their opinion and it's easy for them to tell them why they should consider buying products from your company.

How do you get your existing customers involved with referral marketing? It starts with offering your customers something valuable in order to get them to participate. Some companies will provide discounts or free products as it does provide the existing customers with an incentive to actually provide you with names of people they think may have interest in the company. Take a lesson from DirecTV and their referral marketing promotion. For every customer that joins based on a referral, the existing customer will get $100 and each new customer will get $100 off their bill as well. It's a great incentive and it does get a lot of people working on spreading the word about DirecTV and getting their friends and family members to join.Take a look at something that you can offer. While you probably cannot give them $100, you might be able to offer promotional items like t-shirts, mugs, and duffel bags. Giving them something tangible and something that doesn't look cheap will spark a lot of interest from your customers and will get them talking.

There are a lot of companies that use other methods of referral marketing and will simple ask the customer to fill out a list of names when they come in. This might work, but it rarely does because the customer really wants know what's in it for them. This usually leads you to turn back to a cold calling list, and we all know that this method is not a reliable way to get new customers.

When your sales team is able to call people that are referred by other customers, it's a lot easier to talk to them and it's a lot easier to get them to buy products. You can start out by saying something like "your friend, John Doe asked me to call you about this great new product we are offering. He thinks it will really benefit you in this way." This immediately gets the potential customer to recognize that their friend really does think the product will benefit them in some way and they are likely to listen to what you have to say.

Referrals also help you to strengthen relationships with your customers. Since you are offering a tangible item or something of value to the existing customers, they are usually loyal to you. They will see that you really do value their support and help and this makes them have a positive experience with your company, something that is vital to your small business.

If sales are starting to slump, consider using a referral campaign to make money. The word of mouth campaign is a great way to build up knowledge and interest in your company. Offer a product for a low cost and make sure this is a popular product. This way people will start talking and they will tell their friends because they do not want them to miss out on such an amazing offer. This is how the website Woot.com became so popular and has been able to make a lot of money.