Here’s a question for you – what makes some businesses more successful than others?
The chances are the answer is a strong referral network.
It makes sense when you think about it, because effective referral networks can help to build mutually-beneficial relationships and these can help to drive sales and increase revenue. In fact it’s estimated that on average 70 per cent of all new business is generated through referral networking or relationship marketing. But why does this networking strategy work for some and not for others? Why do some business find that, try as they might, they still fail to generate as many referrals as they would ideally like? The answer to that is simple – because they’re going about it in the wrong way and trying to build relationships with the wrong people. If you find yourself in this position, then the following information might be of help.
If your referral marketing strategy is failing to deliver, then ask yourself the following questions, and be sure to answer honestly.
Am I offering a product or service for which there isn’t a market?
Take an objective, look at the product or service you’re offering and ask yourself ‘is there a need for this?’ What you’re offering may have seemed right when you first came up with the concept, it may have even got the backing of friends and colleagues, but if there isn’t a market for it you’ll never succeed in generating referrals. If you find yourself in this position you may need to refine your product or service to make it more appealing to the market place; or you may need to go back to the drawing board and start again.
Does my product/service offer good value for money?
It doesn’t matter how good or refined your product/service might be, if it doesn’t offer good value for money it won’t sell. It may be an all-singing, all-dancing product, or the best service available, but if it costs too much in terms of the value it gives, people will choose to spend their money on something else. Ask yourself would you refer such a product or service if it offered poor value for money? The chances are that you wouldn’t, so that issue needs to be addressed before you can expect to generate more referrals.
Are you marketing your product/service as effectively as you could be?
Are you communicating the benefits of my service or product effectively? Does your marketing clearly convey the benefits of your product/services and leave potential customers in little doubt about how having the product might benefit them? You may be aware of the many advantages, and you may know why your product/service stands out in the market place, but unless you are able to get that message effectively and clearly, no-one will think about referring it to others. Look at your marketing strategy with fresh eyes, and try to see it how potential customers might see it. Would you refer a product or service if the benefits weren’t patently obvious?
Is your business referral marketing strategy as effective as it should be?
Do you know what you ultimately want to achieve, and have you put the necessary mechanisms in place to achieve your goals? Why is this important? Well, the generation of referrals only comes when you take an overall planned approach to this method of marketing your services. If your approach is wrong or ill-judged, or if your end goal is unclear, you may have to re-evaluate your strategy.
Does your business inspire sufficient confidence to make other businesses want to recommend you?
If you want to generate more referrals it’s worth bearing in mind that it’s not only your reputation that’s on the line; it’s also the reputation of anyone who chooses to recommend your product/service. Other businesses will only make recommendations if they know and understand what you are offering, and like and trust your business. If they don’t think the services you offer can be helpful or beneficial to others, then they won’t recommend them.