Why Referrals are a Great Way to Attract New Customers
Think about this for a moment. What is more believable? An advertisement telling you that a particular used car dealership has the best prices in town? or a friend that tells you about the great deal he got from a used car dealership? Most people will take what someone says that they know over a printed advert any day. This simple illustration shows the power of a referral. The reason people believe a referral over an advertisement is that we are bombarded with so many marketing messages each day that we never know which ones to believe and which ones are just talk. So if that is what you would do as a customer, how are you incorporating that into your plans to make sure your customers are sending referrals your way?
Be More Proactive about getting Referrals
Many experts will agree that one of the most solid ways to build a business is on word of mouth referrals. But how many businesses actively implement referrals as part of their marketing strategies? It needn’t be something big or expensive. A simple thank you note with a gift or a note attached can go a long way to building your business. There are also ways of incentivizing customers to refer even more business to you. If you have a service business you can offer a free consultation. If you have a retail store you could offer a discount voucher on their next purchase. In that way you will not only get them to return to your store to purchase again, you are also reaffirming that they stand to benefit if they refer more business your way. Here is an example of how you can implement a referral scheme in your business.
If for example you have a beauty salon you can offer a free manicure as a thank you and bonus treatment for clients that refer friends to you. Most times when they make an appointment for their free manicure they will often have their usual treatment of a facial or a massage at the same time. You benefit as the lifetime value of your customer increases, plus you get to attract new customers at the same time. Once the new customer has experienced your beauty salon, they may too become a regular customer.
Keys to Generating Referrals
The referral needs to be genuine otherwise it is no different from getting a pitch from a sales person. This means that the person giving the referral must have experienced your product or service first hand and have been genuinely impressed with it.
Make the thank you note specific, even going as far as to include the new customer’s name so that it reflects your genuine appreciation to your existing customer for the new referral.
Make the thank you gift something that your customer will appreciate, something that will be of value to them that they can use. Be generous in showing your appreciation. Remember the lifetime value of a customer is something worth investing in.
Referrals are an easy way to build your business if you actively and persistently invest time and effort in getting them. If you are confident in the quality of your service or products then many times your customers will refer friends on to your business without you having to do anything. However, if you really want to take advantage of the power of referrals then you need to become more proactive in your approach. The small ways in which you show appreciation to your existing customers can be very effective in incentivizing them to send more business your way in the form of referrals.
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Created With Love by Melina Abbott © 2026