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Sunday, June 15, 2014

Using Customer Referrals to Grow Your Business

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Building a customer base for your small business is very difficult. It can be hard for you to gather new clients regardless of the methods being used. Marketing methods that are varied can be one of these techniques. Cold calling on potential consumers is another. You can even use direct mailings to potential client’s homes. Yet there is an untapped resource for many businesses. They fail to recognize the potential of the current customer referral.

The back bone of your business development plan can be customer referrals if you use them in the right way. The best advertisement for your business is your current customers who are pleased. You can drastically grow the amount of new customers your business generates if you are able to start getting referrals through you current customer base. An efficient method to do this can often be the difficult part to figure out.

By using your head you can really think of some great ways to generate referrals from your good customers. If a current customer of yours refers a new customer, you can offer a bonus or special offer to them as a reward. Both ends of this referral can receive the perk. One example would be to offer a buy one get one free coupon to the current customer and the same offer to the referred customer you signed up. This method invokes some added costs, which is really the only draw back.

Weighting the cost of new customers is something that must be done to compare. What was the amount of time you used to get this new client? How much marketing was required to bring them in? Both the time you spend and the marketing you develop cost you money. Spending money on these methods usually doesn't cost any more or less than offering a bonus for referrals. Do not forget that this referral bonus is mean to bring in a new customer, but also makes your current customer base more pleased with you.

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