Referrals - Birds of a Feather
Yes, it’s true: Birds of a feather do flock together. In the direct marketing world this means that customers who do business with you in all likelihood know other people who need your products or services, too. In other words, your customers may, in fact, be able to point you to your best prospects. And that’s true whether you sell to consumers or businesses…or are prospecting for new members for an organization.
So, if you are interested in the cost-efficient acquisition of highly qualified new prospects, you should have a customer referral program up and running. If you don’t, you’re overlooking one of your most profitable (and practically free and pain-free) sources of new business. Even if you do have a referral program, go ahead and read this anyway. It may be time to re-evaluate what you have in place.
Using Referrals to Build Prospect Files
Referral programs are simple. All you do is ask your customers or members for their help. And do it in a nice way. Here’s what you’ll find:
• Referrals are more qualified than “cold” prospects generated from other sources.
• Referrals have a higher conversion rate at a lower cost than other prospects.
• By asking your satisfied customers for their help in introducing their friends, neighbors and colleagues to your company, you help solidify customer relationships.
• New customers who come to you as referrals frequently spend more money with you right from the start.
• Referral programs don’t take a lot of time or money to test and to maintain.
Catalogers tend to be the most consistent about asking for referrals— sometimes they do it subtly with a check-off box on a catalog request card, as Lands’ End does ( see sample on previous page). At other times, they’ll use a bind-in reply card or area on the order form such as Title Nine Sports.