My Definition of Referral Marketing: “The process of building a network of sources that will refer multiple clients to your business.”
Top Ten Reasons Referral Marketing is so Effective
- Your Network is Unlimited. As you begin to build relationships with powerful referral sources and you get your clients to refer you, the network continues to grow with no end in sight.
- Higher Quality Clients. Since Mercedes’ clients seek out a referral, you get higher quality clients just from being “referral based.” Referred clients usually don’t even ask about the price. They are more concerned about quality than price.
- Pre-Qualified Clients. By educating your referral sources, your prospective clients will be pre-qualified; therefore they will already know more about you (and that you charge more than the commodity or service level company).
- People Trust Referrals. Wouldn’t you agree that referrals already have a level of trust for you? Sure they do. They trust you because the person they trust knows you.
- Reduces Competition. With referral marketing, you are no longer fighting for the best ad placement or getting copied. Relationships are hard to duplicate.
- Low Cost. With the right referral marketing system, you won’t spend money on expensive advertising. The cost is very low for referral marketing. Even with a Referral Reward Program (which I highly recommend), the cost is still extremely low compared to most advertising.
- High Returns. The returns can potentially be huge. In many industries a 4 to 1 return on investment on advertising dollars would be outstanding. In other words, if you invested $1,000 in advertising, you would get an average of $4,000 in return. With referral marketing, if you pay a 10 percent referral reward and everyone cashes in on it, you will have a 10-to-1 return. In my reward program, I get a 20-to-1 return, as less than half of the certificates are ever redeemed. 8. Returns Guaranteed. With a referral reward, you don’t pay it until after the product or service is paid for. With traditional advertising, you put your money on the line and hope for a return.
- Small-Time Investment. The biggest objection I get to referral marketing is “time.” See #10 to overcome that challenge.
- Expo-nen-tial Multiplication! Would you be interested in how investing just a few minutes a day doing something really fun would give you a return of over $10,000 in new business each and every month after six months? Of course you would. Even though I can’t guarantee it, I have seen it happen many times.
If you need help in creating systems to work in your business, I want to help you! I want to meet you at one of my business growth conferences. For more information, click here.
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