THE POWER OF A REFERRAL BASED MARKETING PLAN
I want to talk to you about what is perhaps the most effective, yet underused referral strategy that I know which is to….
…simply ask for them.

Many business owners and executives, professionals and even sales people have all sorts of mental hang-ups about asking for referrals. However, most of those hang-ups are invalid and I find that those who ask get!

Now here’s a secret about customers or clients who refer that can be worth a great deal of money to you. Understand that the person who refers once can and will refer many more people, many more times if motivated to do so. Once a customer or client has referred someone to your business then that source of referral should be worked like the goldmine that it is.
You should know that massive research by major to consumer direct sales companies and organizations indicates that the average person has an immediate circle of influence of fifty-two. Fifty-two other people.

The typical executive, for example, knows about fifty other people at a similar executive level in his own or closely related industries. This number tells you that each customer or client who comes through your business could bring you as many as fifty other customers or clients.

You should also know that research by the American Management Association indicates that the average satisfied customer only tells three other people about the satisfactory experience. Moving that person from telling three to telling fifty does require some definite action on your part. That action needs to focus on the giving of recognition and appreciation.

When a satisfied customer sends someone to you the sender should immediately receive some recognition and appreciation. Possibly a quick thank you note or telephone call at bare minimum. That should happen right away. Subsequently some type of thank you gift is usually appropriate and effective.

We send steaks, books, clocks, calculators, small electronic items, knife sets, all sorts of things. I recommend gifts that you do not ordinarily sell and a different gift each time the person refers. You will really be amazed at the positive results from this kind of action.

You’d also be surprised, incidentally, at the negative results of not doing this. The client who refers once and fails to get recognition and appreciation will probably never say anything to you, but to himself and often to a friend or associate he does say, “Can you believe it? I sent that guy a customer and never got as much as a thank you.” And then he never refers again.

Again it’s interesting to note that a basic success principle often discussed in personal development context is also a marketing strategy. It’s called the, “Attitude of Gratitude.”

Finally, if you want to even more directly stimulate referrals from your customers or clients you might want to consider the second party gift certificate idea. Here’s how this works:

You’re a satisfied regular customer of a clothing store. The owner of the store says to you, “John as you know, most of our customers come as referrals from other customers and we appreciate that and try to encourage it. This month we’re doing something interesting that you might want to help us with and be able to do a favor for your friends too.”

The store owner then gives you a ten dollar gift certificate negotiable only by a second party that you, the customer, addresses to and sign it over to. This idea works extremely well for just about any kind of retail business, service business, home products business, restaurants, stores, beauty parlors, carpet cleaning companies and so on.

If you’ll use this idea, you’ll again want to follow it up with recognition and appreciation to the customer who does pass along a coupon that is ultimately redeemed by a new customer.

 THE POWER OF WORD-OF-MOUTH
In this post we’re going to talk about one of the most exciting marketing strategies of all, stimulating word-of-mouth advertising.
Word-of-mouth advertising is the most powerful, effective type of advertising there is but it’s the only kind you can’t just buy by the page or by the minute. It has to be created, stimulated and nurtured with truly creative techniques.

Most businesses take whatever word-of-mouth advertising they get but I’m here to tell you that you can exert a considerable degree of control over this type of advertising and marketing.
The reason that word-of-mouth advertising is so valuable is simple. Nothing you could ever say about you, no matter how well you say it, can have as much impact and credibility as something someone else says about you – especially an enthusiastic customer or client. 

Also there are some things you simply can’t say graciously about yourself that others can say.

Artificial word-of-mouth advertising is still the most effective form of TV commercial. It’s called ‘Slice of Life’ and you’re very familiar with it. It shows a scene with one ordinary person telling a friend or associate how good a product is. Laundry soap, personal computers and hundreds of other products and services are still sold this way.

Far better though is real word of mouth advertising and there is a single, basic secret to stimulating a high rate of word-of-mouth advertising. I first discovered the secret from studying the Disney Companies.
Word-of-mouth marketing is taught there as “find ways to do what you do so well and so uniquely that your customers cannot resist telling lots of other people about you.” At the Disney Parks this principle is implemented in the forms of cleanliness and authenticity.

When first time visitors to Disneyland and Disney World are surveyed and asked what sticks in their mind most about their visit the overwhelming number one answer is the cleanliness of the parks. The number two answer is the authenticity of the environments.

Disney marketing pros then understand how this translates into real life. Harry and Marge go back to Dubuque and tell their friends, “You can’t believe how clean the parks were.” Then four more families from Dubuque pile money into motor homes and bring the money to the mouse.

Because they understand this, the Disney people think of park cleanliness as marketing, not just maintenance. They use this to stimulate referrals. Any business can also find ways to stimulate referrals. To stimulate word-of-mouth advertising often by doing things that should be done anyway.

In a retail type business excellence and creativity in the store environment and in customer service are most likely to stimulate referrals. I know a dentist, for example, who ten timesed his practice in just twenty-four months without increasing his external ad budget by even a dollar.

He identified seven hundred different things to change in the office environment and in patient communications and those changes were responsible for developing a very high level of word-of-mouth advertising.

THE SECRET TO MORE PROFITS AND CUSTOMERS FOR LIFE
Warning! This post contains phenomenal information on how to grow your business and boost your profits with a monthly customer newsletter. But you should also know that I’m also going to challenge you not to be what I call a newsletter pansy!

It’s a fact that customer newsletters help businesses succeed. And the best and most effective way to grow your business, boost your profits, and get more customers for life is to mail monthly. Anything less frequent than monthly means that you are simply being a newsletter pansy.

Dollar for dollar, newsletters are the most effective marketing tool available. Plus, customers who read your newsletter are usually in a good position to do business with you again and recommend your product or service to others. And that’s where your new business comes from! Let me share with you more of what I call the magic of newsletter marketing.

Newsletters are not perceived in the same manner as are postcards, fliers, or other forms of direct mail marketing. When people receive these or anything else that has a sales and marketing feel to it, their guard goes up and they think, “Uh-oh. What are they trying to sell me?”

Newsletters work well because they tend to be read as informational, making them more welcome when they are received. As such, they have higher readership than other forms of advertising. People also tend to be more receptive to what you have to say in your newsletter, because newsletters aren’t meant to be sales tools. Rather, they are designed to be a resource.

Because people are conditioned to be less resistant to reading information, which is exactly what a newsletter should be, most people read a newsletter with their guard down. This is a HUGE marketing advantage. When your customers’ guard is down, they are open and receptive to what you have to say!

Now I want to share with you five of the many proven ways that newsletters will help your business grow.

Secret  1. Newsletters Help Keep Customers
Your current customers hold the best prospects for future growth. Plus, the longer they are customers, the more likely they are to spend with you. A monthly company newsletter helps you stay top-of-mind with your current customers. When your newsletter arrives, your customers start to think about you. Issue after issue, your newsletter reinforces your relationship with your customers and gives you a way to tell them about products and services they may not know about.

Secret  2. Newsletters Help Get New Customers
You want your newsletter to help you get new customers. Informative articles give your newsletter what marketing pros call “pass-along value.” Your newsletter makes it easy to pass on the information. Because people read newsletters as a publication and not as a marketing piece, a newsletter is a great way to tell potential customers about your business.

Secret  3. Newsletters Help Build Credibility
When people read your brochure, they treat it as a piece of marketing literature. But when they read your newsletter, they treat it as a publication. Your newsletter also gives you the opportunity to tell people success stories about what you do and how well your products work. You can illustrate the benefits of your product or service with statistics and customer testimonials. Credibility is a huge benefit of a monthly printed newsletter.

Secret  4. Newsletters Help You Stand Out from Your Competition
Since you decide the direction and content of each newsletter, you can differentiate yourself from others—especially the larger businesses that typically do not produce customer newsletters.

Secret  5. Newsletters Help You Build Your Brand
Branding is the art of making people aware of who you are, what you do, and how you’re different from and better than the competition. You want to have a little bell go off in people’s heads when they hear your name. You want them to say, “Oh, yes, they’re the people who…”

So there you have it—I simply can’t say it any more clearly!  Publishing a monthly customer newsletter is smart. Not doing so, no matter what business you’re in, is simply being a newsletter pansy

 

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