If you’re not working to get more customers from your existing customers, you’re missing out on a huge pool of revenue that could have a significant impact on your bottom line.
The beauty of referral business is that referral customers cost less to acquire. Compared to the leads you generate from advertising, direct mail campaigns, and other marketing initiatives, referral customers come to you already qualified and already trusting in the quality of your offering and the respectability of your staff.
If you have a referral-based business, you can potentially create a stream of qualified customers who arrive at their doorstep ready to spend. You’ll be able to put less focus on advertising, and more focus on serving and communicating with your existing customers.
Generally speaking, a referral program can generate outstanding results for nearly any business. Since most referrals do not require any effort, the addition of a strategy and a program will often double or triple the number of qualified referrals that come through a business door.
There are, however, a few types of businesses that will not benefit from a formalized referral strategy. These are businesses with low price points – like fast food restaurants. Their customer base is already large, and I would say that their efforts would be best spent on increasing their average dollar sale.