extract higher profit from referrals
As the new year gets underway, it seems sensible to ask ourselves what our priorities should be for 2019. Clearly, priorities vary from business to business, but as the economy threatens to tighten and the pressure on return on investment continues to dog us, there are things we should all have as priorities in 2019 – or perhaps any year.
This is the fourth of ten THOUGHTS addressing suggested priorities for 2019.
Yesterday, I wrote about increasing the average sale per customer, a critical issue for every business. Earlier THOUGHTS address the importance of maximising conversion rates, also central to maximising return on investment.
Recent research found that conversion rates are 3 to 5 times higher, and the return is 25% higher (on average and across industries) when the customer is a referral. Referral customers have been found to be 18% more loyal and 4 times more likely to refer to yet more customers.
The question is, therefore, what is your strategy for maximising referrals?
When I ask that question, most business people respond along the lines of, ‘offering a quality product’, ‘providing good service’, ‘ensuring good value for money”. In other words, they have no strategy for driving referrals. They just do what they think needs to be done and then hope and pray. From where I am sitting, hoping is useless, and praying seems downright bizarre.
Seth Goden wrote a book called ‘The Purple Cow’. The central message in the book, was that you don’t tell people when you see a brown, black, black and white, or brown and black cow – but you will almost certainly tell a number of people if you see a purple cow because the purple cow is, to use Seth’s word, ‘remarkable’.
Seth also noted that ‘no one recommends a mediocre restaurant’. You might go to a mediocre restaurant because it is cheap or close by, but you would not recommend it. You would not recommend it because you tend to recommend only the remarkable. In fact, we tend only to talk about the remarkable.
There are few businesses I have been into recently that were remarkable. As a result, there are few businesses I have recommended of late.
In business as opposed to in the paddock (where the purple cow lived) referral requires more than just being remarkable. It requires being remarkable in a way that is directly relevant and plays to the needs, wants, expectations, ego, or related aspect of the customer. That said, that which is remarkable can be related to the product, the service, the customer experience, the price, availability … or any other element or combination of elements.
There are, of course, many sales systems and technologies you can put in place to drive referrals.
Place referral very close to the top of your marketing priorities in 2018. You will be happier, and your customer will be happier. Leverage the repeating effect of referrals.
For this and so many other reasons develop a remarkable element to your offering and or the customer experience. That which is remembers is much more likely to be spoken about.
Develop a purple cow that exceeds customer expectations and gets them talking.
SOURCES OF STATISTICS
Wordstream, SIO Digital, Salesforce, Annex Cloud, Nielsen, Seth Godin and Small Business Trends
MORE THOUGHTS – www.djohncarlsonesq.com