Three factors for a winning customer referral program
Customer referrals are a key strategy for high-growth small and midsize businesses (SMBs) according to a recent Vistage Research study on customer engagement.
Our study of 1,352 SMB CEOs found that high-growth businesses — defined as companies with double-digit revenue growth over two years — ranked customer referrals as one of their most successful strategies in sales. In addition, 20% of these CEOs selected referrals as their number-one marketing strategy.
Consistent results from a structured program
So why aren’t more SMBs enjoying this growth boost from referrals? Quite simply, it’s because they lack a formal referral program. Many companies approach referrals passively, expecting that their customers will recommend them as long as they’re happy with a product or service. The problem is, this unconscious strategy leads to unpredictable or inconsistent referrals.
To better understand the inner workings of a strong referral program, Vistage Research asked for insights from experts from our community; John Goodman, vice chairman of Customer Care Measurement & Consulting; Ben Landers, president and CEO of Blue Corona; and Colleen Stanley, president and founder of SalesLeadership, Inc. What they shared — and what our research confirms — is that a winning referral program incorporates three key components:
Let’s take a closer look at each of these.
Talent — Individuals and teams are focused on building meaningful human connections.
Consciously building relationships with people — whether they’re existing customers, prospective customers, influencers, referrers or those who are referred — forms the foundation of a successful referral program.
Training — Skills and processes are developed to support a formal referral program.
A company can’t deliver on a referral program unless its people are equipped with the right skills, processes and tools.
Technology — Digital tools and platforms are integrated to optimize and scale referral activities.
Technology has the power to strengthen and scale your referral activities, but it shouldn’t be used as a crutch for building relationships. Use it in conjunction with talent and training.