Word of mouth remains the most powerful form of marketing, and now that practically everybody has access to social media, it’s easier than ever to capitalize on word-of-mouth marketing.
A recent Neilsen report indicated that 92% of consumers were more likely to be influenced by a friend’s recommendation of a business than they would by any other type of advertising. Plus, they are about four times more likely to buy something when referred to a business by a friend. Social media marketing is among the fastest growing marketing trends for businesses today.
That’s why it’s imperative that small companies today encourage their loyal customers to promote them on Facebook, Twitter, Yelp!, foursquare and other rapidly growing social media platforms, according to Annie Tsai, author of the new book “The Small Business Online Marketing Handbook: Converting Online Conversations to Offline Sales”.
Fast, Easy and Affordable
Actively encouraging customers to refer your company or products to their family, friends and acquaintances via social media is the easiest, most affordable and fastest way to impact your sales, Tsai said.
“Business are so busy focusing their energy on acquiring new customers that they often neglect one of their most valuable resources: Active referrers,” Tsai told the
Materials Handling Network. “Though this may be a small percentage of your overall customer segment, setting up a basic program to support them and encourage their activity is well worth your time and resources.”
One effective way to encourage positive referrals is to reward customers for recommending your company, according to Tsai.
“Even if you don’t have a formal offer that rewards the existing customer for bringing in new business, find a way to say thank you,” she said. “Put a note on that person’s account to give them a little something the next time they come in. The gift could be as small as a coupon for a purchase, a small freebie, or a gift card for future service.”
Offer Incentives for Referrals
Another strategy is to offer your customers incentives for referring their social media contacts to you. Offering retail items as an incentive is a more cost-effective way to encourage referrals than offering services because of the built-in mark up from cost.
Using gift cards as an incentive also is a great idea because it encourages customers to return to your business to spend money. Plus, encouraging your existing customers to buy gift cards for their family and friends — perhaps at a discount — offers an excellent opportunity to broaden your customer base.
Online Reputation Management
Monitor what your customers are saying about your business on social media. When somebody gives you a glowing review, repost it on your own social media platforms as a personal testimonial. Reputation management also is an effective way of identifying customer problems and addressing them positively before they can cause more damage to your business.
Tsai also recommends offering “bring a friend” promotions because it helps business owners understand which of their customers are most willing to be evangelists for their products. They can then fine tune their social media marketing so that it is optimizing the company’s most “rabid fans”.
“Once you have a successful referral program in place, it will practically run itself,” Tsai said. “When you put in the effort to cultivate your active referrers, they can become one of the most profitable segments of your customer base.”