Is there anything more powerful than a referral from a friend? Money can’t buy the credibility that a friend, or even an acquaintance, commands. The recommendation above was actually emailed from a happy Sport Clips
The Matheny’s own two Sport Clips
In September 2005, Chuck was looking for a way to communicate with his customers without having to buy expensive ads. He also wanted to improve 1st Time customer retention. He decided to give PromoterZ
I’m obviously biased, I think PromoterZ
Another company that attributes a large portion of their sales to referrals is Bike Friday. Here is a description of their referral program from CMO (http://www.cmomagazine.com/read/100105/power_one.html):
The company also uses a referral awards program. Customers receive a set of 12 prepaid postage cards with their name and that of the Bike Friday expert who sold them their bike. Whenever a customer meets someone whose interest is piqued by his bike, he’ll fill out a card and drop it in the mail. Bike Friday then mails information to the contact. It also captures this interaction in its database so that riders who make a referral receive a bonus if their prospect purchases a bike. Customers can choose either a $50 check or $75 credit toward future products. Day accumulated enough referral credits to purchase a $2,000 bike last year.
The referral program has helped the company acquire more than a third of its 10,000 customers; it also helps drive sales. Over the last three and a half years, the program has generated $1.3 million in sales. In 2004, 29 percent of its sales came from referrals.
Customer referrals work and as the advertising chaos continues to increase, they will become more and more powerful. If you are not already doing it, spend some time thinking about how you can make it easier for your customers to tell their friends about your business. It will be worth the effort.