To continue yesterday’s post, referrals are an extremely valuable source of new business.
First of all, they are nearly free. No expensive advertising. Maybe some staff time, maybe some rewards or commissions for referrals, maybe a sign in the office or a mailing or email blast to your customer base. If you’re really ambitious, some kind of forum or user’s group. That’s about it.
Secondly, someone who comes to you through referral is MUCH more likely to turn into a customer. Why? People trust referrals WAY more than they trust advertising.
In almost every business, actions to encourage referrals have a better ROI (Return on Investment) than advertising. In fact, many businesses survive, even flourish on referrals and word of mouth alone.
Really, the only reason for advertising and promotions is when you can’t get enough new business through referrals and word of mouth.
Tomorrow: So what are the statistics on trust? Which do people trust more, information on your website versus expert reviews? Be prepared for some surprises.