The Overlooked Marketing Channel: Customer Referrals

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The Overlooked Marketing Channel: Customer Referrals

In the marketing space, there is constant talk about customer advocacy in social media, making moments matter and all things surrounding the digitally-based customer conversation. However, I believe that we tend to get wrapped up on all things digital (maybe because it can be measured, or get large budgets) and we tend to forget the most standard of marketing channels – the customer referral.

I keep a library of old sales books, a hold-over from sales trainings and my early career choices. I refer to them often, as I find that the more I develop in digital marketing, the more instruction and wisdom is available in traditional (old) sales techniques. At its core, sales training is about learning about the customer and helping them find a solution. The more the customer talks and explains their situation, the more information you are able to work with to find them a solution.

Digital marketing can learn a lot from established sales principles.

Today, studies and research consistently present us with digital channel comparisons, sometimes it may include offline channels. But a recent study caught my eye, as it presented comparative measurements showing that Customer Referrals, by a large margin, were the #1 conversion channel.

In this client survey from Implicit  of nearly 500 clients who also use Salesforce as their CRM system, 3.63% of leads from customers and employees resulted in a sale. The word-of-mouth referral rate doubles the conversation rates of website and social media leads, 1.55% and 1.47% respectively.

Word-of-Mouth Referrals are still the best, most powerful form of marketing for your business.

It's the really good and the really bad that is shared.

Those that invest in the customer experience are making an investment in referrals.

The experience that people have working with your agency, experiencing your service or product is the product! The experiences people have mean more to them than any glossy brochure or Google ranking – and they share it!

The most powerful marketing tool at your disposal is the customer experience. If people like it, they tell others about it. If people have a bad experience, they tell others about it. While campaigns may bring new visitors, your best chance at referral marketing lies with the customers in your care – right now!

I was never more aware of this than when I stayed at The Langham in Chicago. Now, I have had great hotel experiences where I knew that the staff were focused on the visitors, but the Langham was obviously a step above what I had experienced. I truly felt that I was the most important person in their care when I talked to them. Not anything else was taking their attention, it was fully on me. It made a memorable impression – even on someone who spends a lot of time in hotels.

Another recent study found that nearly 3/4 of companies do not have a “formalized marketing message process for all employees to follow.”  Of the companies that did have a formal marketing message process, 60% stated that it was not followed consistently. Therein lies the key. Each employee must know the message of the company and how it is displayed in customer interactions.

Here is the key factor – a hotel is a hotel. There are not a lot of “extra’s” that really define one from the other. It was the service and the experience of that service that made the impression – the people. Marketing is effective to bring people in the door, but the experiences people have will be the ultimate factor. Those companies that invest in the customer experience are making an investment in marketing.

Every Customer is a Salesperson

"Every Customer is a Salesperson"

“Every Customer is a Salesperson”

A visitor’s experience is the best advertising campaign and investment. In his book, “Endless Referrals” (McGraw-Hill, 1998), Bob Burg states that Every Customer is a Salesperson….Train them to sell you.”

In any business, this instruction is clear. The experience that a customer has on either end of the spectrum will be shared. Non-experiences tend not to be shared. Those that are memorable – either way, those will be shared. Sometimes they will even be shared digitally.

To encourage a customer to share and be a salesperson of your business, they must consistently experience the best you have to offer – a consistently outstanding experience. This means that all of your employees must be able to act in a way that reinforces the company message and be able to articulate it in whatever capacity they work.

I have found in my own speaking business that the more time I invest in producing a higher quality talk, the results are tangible by the referrals and offshoot invitations. It has changed my marketing budget significantly to focus investment on the audience experience, the follow-up and the results; rather than heavily investing in traditional channels for new leads.

Conversely, I had an experience in talking with someone who was building a house. They were asking friends and associates about builders and who they knew. When I asked if they had talked to a specific local company, their response was telling, “From what I’ve been told, no one uses that company twice.” This builder was known for their strong marketing presence in the local community, but word of mouth referrals told a different side of the customer experience.

Word-of-mouth tends to be a forgotten channel when all of the digital channels, social, CMS, and automated messaging taking center stage in our attention. However, I tend to believe that the most powerful marketing message is the one communicated between two humans in conversation. Those are the ones that will be primarily communicated to friends, associates, and colleagues by true (non-digital) word of mouth.

About the Author:

Matt has taught Google employees how to understand and use Google Analytics, consulted with Experian on how to present data, developed online marketing training for both Proctor and Gamble and Johnson & Johnson and presented analytics methodologies to Disney, ABC & ESPN. As founder of SiteLogic, Matt teaches marketers how to create measurable and profitable strategic marketing plans.

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