According to statistics about 80% of all companies obtain anywhere from 70-80% of their newest business from referrals. How this works is if someone purchases a product or service from you and then they tell others they are satisfied, they are giving you a referral.
These folks are then more likely to purchase products because they know someone else who purchased from you and is satisfied with that purchase. You don’t really have to put a lot of effort into this type of marketing. But if you do form a strategic effort you can manage your business with almost no advertising cost at all.
This kind of marketing works and proof of that lies in the many businesses that made millions even before television or internet.
You can develop an effective referral marketing strategy by following the 80/20 rule. This 80/20 rule is simply put; a principle that follows 20% of something is always responsible for 80% of the results.
Apply this basic concept to your business by making sure you put 80% of your efforts into satisfying the top 20% of your customers that these satisfied customers, will, in return, lead to a growth of 80% new business.
Your customers basically become your new sales force by providing word of mouth vast growth potential. Now, because you have rewarded and satisfied your valued customers they tell others and your value and services soar.
Then you decide to increase your top 20% customer sales force to that many more that actually work for your product or service without adding them to your payroll. For this to provide the ultimate payoff you must be trustworthy and credible. This new sales force only knows about you from the first group of customers. They need to rely on your services and know that you are more than just a name. They need to know you are accessible and stand behind your products. Then they will refer your goods to your next new sales force and so forth and so on.
If you want to increase this referral system even more you have to take a more active part in the action and actually familiarize yourself with key people you wish to target. This focuses your networking so that this specific, target group becomes your new sales force.
Tags: business, customer sales force, profits, referral marketing
