Your company can use referral marketing by allowing satisfied customers to direct you to new sales leads.

Referral marketing is an extremely effective alternative to traditional marketing. As most marketing techniques become more expensive and reap fewer profits, people are focusing on the different ways to market a business that are out of the ordinary and are more effective than usual. The thing that sets referral marketing apart is that typically your satisfied customers are the ones who are sending new clients your way. Business clients will trust other customers infinitely more than an ad, which simply offers the spin the seller wants it to have. For this reason, referral marketing works much better at getting new customers in the door.

Having your satisfied customers put your company’s banner ad on their websites is a great way to use referral marketing. These ads allow visitors to get to your site with just one click. Then they can peruse the information, products, and services you have on your site. When this generates a sale, you should typically compensate the company whose website carries your ad. You can also work out an uncompensated referral program with businesses that sell products and services that complement yours. Affiliate programs are a formal example of this same concept.

More direct referral marketing is also very useful in sales and it is simply by asking satisfied customers for referrals of other companies that they feel could benefit from your product or service. This type of lead is considered a warm lead and is much more likely to become a sale than other types of leads. Remember to always thank customers who give you referrals with a note and even a gift. The value of the gift depends on the value of the sale.

Marketing from referrals is cost effective and has a high rate of success. Simply asking your customers to give you names of new leads does not cost anything. The price of purchasing a gift for a customer who helped you find a new client is a very minimal expense. Your business, however, can see a big boost in revenue as a result of referral marketing.

It is a well-known fact that word-of-mouth is the best advertising. A referral program is simply a variation of word-of-mouth. Satisfied customers give you the name of other companies who could be potential customers. When you contact them, the referral is mentioned and the potential customer will often go back to the original one with questions. Your sales work is being done for you as your own customers are convincing others of your worth.

Ray Perry is an Internet marketing executive with more than 25 years of experience. He is the Chief Marketing Officer at Market Blazer, a small business marketing company and authorized Duct Tape Marketing coach. You can get more information about referral marketing at www.MarketBlazer.com.

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