Attracting customers

Referral Marketing: Do’s and Don’ts

08 May 2017
4 minute read

Often favoured by small businesses, referral marketing can be a positive and cost-effective way to attract new customers. It works by relying on referrals - or word of mouth - to promote products and services. Whether this is executed through ‘refer a friend’ schemes, online reviews or simply a verbal exchange, this approach can have ripple effects and increase a business’ reach tenfold.

Essentially, it all comes down to trust. Customers are far more likely to invest in a service or product with a personal recommendation from someone they know and their good experience.

Here are a few of our top do's and don'ts to help your business get started with a referral marketing strategy of their own!

DO offer a valuable incentive 

Offering a valuable incentive - something that customers actually want or need - in exchange for a referral is a great way to get them on side. Businesses commonly offer discounts, free gifts and exclusive offers to encourage customers to spread the word. set a great example in not only offering incentives to customers for referring their friends, but also increasing the reward value depending on how many friends a customer refers - e.g. £15 off for referring one friend, or free furniture when recommending multiple friends.

DO be direct

Being direct and asking customers to recommend products or services - whether that’s in person, through social media or email - means businesses can be upfront from the start. After all, if the customer has had a positive experience then they should be more than willing to refer you to their friends!

DO build a relationship

Building and maintaining a relationship with customers means they are more likely to keep recommending your brand and products upon multiple occasions. That’s why it’s really important to stay in touch with customers, whether that’s through email, social media or in person. Setting up reminders in a calendar or email automation can help you stay in touch with customers to see how they’re doing, update them on any business developments and keep up conversation.

DO plan promotional activity 

Planning and implementing promotional activity will help to widen reach and target more people - and social media remains a popular tool as the customer effectively does all the hard work. Businesses can encourage their customers to ‘check in’ to their establishments and share their posts to all of their online followers. With careful planning and execution, this is the closest businesses can get to ‘free’ promotional activity!

DO target your best customers

Most business will have customers that have been there from the very beginning, or who they’ve built a strong relationship with. As well as providing direct referrals to friends and family, these customers are also more likely to leave testimonials on the website, write a review or take part in a customer case study - all of which serve as valuable referrals.

DON’T make it difficult 

Businesses should be making it as easy as possible for customers to refer their friends. One way of doing this is to set up a direct link or webpage for recommendations using tools such as InviteBox or Mention Me. As well as setting up links from the site, it’s also important to allow customers to refer people across multiple channels too, such as social media, email, text and Whatsapp.

DON’T neglect your data 

Once referrals have started coming in, it can be useful to understand just where they're coming from! Google Analytics can be used to identify referral sources directing traffic to your website, and also what content customers are engaging with most. This insightful data can then help businesses to optimise their campaigns, be more specific in their targeting and drive even more referrals.

DON’T use a generalised approach 

Simple things like addressing customers with their first name in emails, or using specific sales data to target them based on consumer interests and purchase history will make customers feel more valued. Personalisation not only speaks directly to the customer but it also makes outreach seem less sales-driven and spammy.

DON’T forget to say thanks 

A quick note to say thanks always goes a long way; and it's also a great opportunity to keep communication lines open and build stronger relationships. After all, every single customer counts, and they could be the ones that continue to refer a business time and time again.

At Liberis, we know that the best recommendations often come from our friends. That's why we're rewarding our customers when they recommend us to fellow businesses, with £250 each when they receive a Liberis Business Cash Advance on your referral.

If you’d like to make a referral, give us a call on 0330 017 4167 or let your friend do so and remind them to state that they were referred by you.

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