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The Power of Referrals

Posted on Thu, January 1,2015 @ 15:34 PM

Talk with your customers often. That’s not the message of this post, but it did provide the impetus for it.
referralsphotoA recent conversation with a customer generated some gratifying commentary about our product and how it has benefited her organization. It also provided an important reminder of how she became a customer – a referral.

This particular organization was using an online survey tool to manage invites to its events for clients, until it heard about ABC Signup from a reputable company (and current ABC customer) in the same industry. The now-customer switched to ABC Signup's registration software, loves it for functionality that better serves her needs, and will likely do some referring down the road. “If I come across something that works this well, I’ll sing it from the hills,” she said.

Referrals sell. They have since Eve told Adam how good that apple tasted. Today, with the advent of social media and the reach of the Internet, they can sell like proverbial hotcakes. In Seth Grodin’s book “Purple Cow,” he talks about creating buzz for remarkable products (purple cows) by having early adopters (“Sneezers”) spread the word. Think of some of the products and services that have exploded recently in part because of viral affirmations – Apple’s gadgets, Netflix, Facebook, Youtube, Pandora and even Angry Birds come to mind.

While Grodin’s book focuses more on creating an amazing product or service, your offering really doesn’t have to be especially remarkable or have chic users to earn referrals. It just needs to provide a value-added solution to people’s problems.

And by referrals, we aren’t talking about a “Like” on Facebook or that Google +1 button we tested on our website. Referrals that lead to sales come from reputable sources that used your product or service and liked it enough to believe it can offer value to others.

All of us give or receive referrals on a daily basis, some more tacit than others. It might be a recommendation of a movie, an inexpensive dry cleaner, a good mechanic or a brand whose logo happens to be on your shirt. If your organization’s product/service does what it promises, it isn’t really an imposition to ask your customers to consider referring you to appropriate prospects.

There are a number of ways to create a cadre of referrers. Here are some good ground rules from John Jantsch, the author of “Referral Flood.”

In addition, a couple of Grodin’s 10 recommendations for creating a purple cow pertain to referrals, and though they might overly focus on “Sneezers,” they could be applied to your efforts to create an active base of referring customers.

Differentiate your customers. Find the group that's most profitable. Find the group that's most likely to influence other customers. Figure out how to develop for, advertise to, or reward either group. Ignore the rest. Cater to the customers you would choose if you could choose your customers.

Do you have the email addresses of the 20% of your customer base that loves what you do? If not, start getting them. If you do, what could you make for them that would be super special?

The idea is to kick-start the customers most likely to talk up your business. It takes less effort than appealing to your entire customer base and helps you (somewhat) control the message by picking those most likely to be singing from the same hymnal.

A few minutes a day cultivating this volunteer sales force should be on the to-do list of just about every organization seeking ways to generate new business or reach potential customers.

So, for those of you striving to grow your programs and events, don’t forget referrals as one of the key devices in your marketing toolbox. And for those of you who can’t say enough good things about ABC Signup, don’t stop – especially when speaking to potential registration software prospects!

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