Think of a referral program as free advertising for your business. When customers recommend your product or service to their friends, family, and co-workers, you earn leads that can become loyal clients who will, in turn, continue to spread the word about your business. Gaining more customers is the obvious advantage for implementing a referral program, but don’t forget to consider the following four benefits as well.

A Better ROI on Your Marketing Strategy

Incorporating a referral program into your marketing strategy allows you to rely on customers to do most of the legwork for you. You can reduce your advertising investments so that you can put more of your time and money into other areas of your business.

Customer Retention and Higher Profit Margins

A study of 5,000 German banks revealed that customers gained through referrals yielded a 25 percent higher profit margin. This study also revealed greater degrees of loyalty and retention than customers gained through cold calling or other means.

Brand Strengthening

Startups and businesses with less-developed brands benefit from reward-based referral programs that can help attract customers faster. Branded referrals through social media can also help raise your fledgling business’s visibility, especially if you engage customers and offer helpful, shareable content through your social media platforms.

Greater Customer Satisfaction From the Start

A referral from a trusted friend or colleague makes customers feel more comfortable with the product and service recommended. The referral lends your company credibility that allows new customers to have a greater sense of trust in your business quality. As a result, they may not need further price-based incentives to entice them to become loyal customers.

The greatest benefit of a referral program is that it is self-perpetuating. A good referral marketing program gains one quality customer, who might tell two more, who in turn will tell two more, thereby expanding your customer base exponentially. Get in touch with the Perxi team to learn how Perxi’s resources can help you craft a referral program tailored to your business goals.