Customers are the lifeline for small businesses. Yet the #1 challenge facing small businesses is finding new customers while retaining your existing ones.
To make things even more challenging, small businesses have to also compete with big conglomerates with large budgets and strong brand awareness, making it harder to break through the market and be able to grow a small business.
So how can you as a small business owner reach your audience, get new customers and retain existing customers without the budget of a conglomerate?
Simply put, Referral marketing uses the power of word of mouth to spread the word about a product or service through a business’s existing customers. Here’s how it works.
Take John’s Lemonade for example. John believes that as soon as people try his lemonade, they will love it! The problem John has is that his target audience hasn’t heard of him yet and they are currently buying their beverages from Coca-Cola. Instead of trying to compete with Coca-Cola, John visits a local business park and gives samples of his lemonade to employees He then tells each employee that if they refer one friend to buy John’s Lemonade he will reward them with free lemonade and the person they refer will get their second lemonade free.
By implementing a referral program, John was able to do three things:
1. Build trust
Because the referral has come from a friend, the person referred is more likely to trust his business and his lemonade much more than if they had seen an ad on the internet or in a magazine.
2. Get more customers
By offering his customers a reward for spreading the word about his lemonade and offering their friends an incentive to try his lemonade, he was able to use his own customers to bring in new ones.
3. Retain more customers
The retention rate of referred customers is 37% higher than customers from other sources. They are also more likely to make a purchase. This means that John’s customers will buy sooner and stay longer.
Now, you don’t have to do it old-school like John. We are living in a digital age and there is referral software that makes it easy to create and share your very own referral program with your customers. This means it is now easier than before to grow a small business.
With Referral Factory you can build and customize your referral program without needing a developer. Our easy drag-and-drop feature allows you to make the campaign look and feel like YOUR brand. The platform also makes it super easy to share your campaign using links, buttons, track URLs, embedded and QR codes.
Try it out for yourself with our 15-day trial, book a demo and grow!