Building up your customer base as a small business owner takes time, and a lot of hard work. However, once owners have developed that solid customer base, they often mistakenly focus a huge amount of their time on trying to find new customers; rather than upselling to and nurturing their existing ones.

Fact – it is 6 times more cost effective to sell to your existing customer base. So you can see that focusing on your current customers is a no brainer.

Now your attention is on your repeat customers, it’s time to foster some advocacy, and turn those loyal customers into raving fans, or for the purpose of this article, ‘referrers’.

Word of mouth is without doubt the best and cheapest form of marketing. Delighted customers will keep coming back for more, and talk about you to everyone they meet, therefore doing the selling for you!  So how do you go about harnessing the power of referrals?  Read on to find out!

How Referral Marketing Works

If you provide great customer service, word of mouth referrals are bound to happen naturally.  However, a conscious effort to nurture referrals will result in a greater return on investment from your network.

Here’s why it’s so effective:

  1. You’re broadening your area of influence by tapping into your potential referrers’ networks of business contacts, friends and family.
  2. Referrals are warmer prospects, since they know and trust the referrer, and are therefore easier to sell to. Innovate and find ways to delight people whenever you can, and in turn, they will become loyal customers willing to tell their great experience stories.
  3. The referrer is providing a vote of confidence by making the recommendation, which is a powerful step in generating more potential customers.

Here’s the 10 steps for turning your customers into raving fans:

  1. You must of course deliver the product and service to the standard that your customer expects, but that‘s not enough;
  2. Once you have done this you have to WOW your customer with something that is above and beyond their expectations;
  3. The best “WOW’s” are not actually related to the product or service you are supplying;
  4. They should be as personal to that person as you can make them – perhaps a birthday card with a bottle of their favorite wine;
  5. Consistency is key: one time gestures will not build the required relationship with your customer. Smaller “WOW’s” given more often work better than big, one-off gifts;
  6. Systemise and humanise the process, and delegate to somebody who you can hold accountable for delivery;
  7. Consider time and money aspects carefully. It is people that refer, not businesses, so a personal phone call could be more valuable to your customer than an expensive bottle of wine;
  8. Don’t be afraid to ask and ask again for referrals. Ensure you do so after giving great service or delivering your WOW, just don’t make it too obvious that the two are connected;
  9. Make it easy for customers to refer to you; do as much of the work as you can for them, write the email for them, send the invite to their contacts
  10. Test & Measure as much as you can and ensure you know the Return on Investment from your referral programme, as you would from each marketing strategy you implement.
If you would like to learn more about turning your customer base into raving fans, who refer and sell for you, check out my Customer Mastery Workshop, which is held once a quarter.