{"id":28406,"date":"2020-05-28T17:12:58","date_gmt":"2020-05-29T00:12:58","guid":{"rendered":"https:\/\/birdeye.com\/blog\/?p=28406"},"modified":"2024-02-05T00:32:58","modified_gmt":"2024-02-05T08:32:58","slug":"importance-of-referrals-for-your-business-explained","status":"publish","type":"post","link":"https:\/\/birdeye.com\/blog\/importance-of-referrals-for-your-business-explained\/","title":{"rendered":"The importance of referrals for your business explained"},"content":{"rendered":"\n<p>When you have a problem that needs solving, where do you look? Most people turn to their network. Whether you are looking for a new healthcare practice, a new car, or a realtor, you typically reach out to the people you trust &#8211; your friends, relatives, or people you know who will guide you without bias. These people, whose opinion you trust, act as promoters of the business they recommend. The impact and importance of customer referrals are undeniable. It is a powerful tool to acquire new customers without actually making a big dent in your marketing budget.<br><gwmw style=\"display:none;\"><\/gwmw><\/p>\n\n\n\n<p>With referrals, businesses can enable the most powerful marketing engine that they have: their own customers.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/birdeye.com\/resources\/guides\/the-complete-guide-to-referral-marketing\/\"><img decoding=\"async\" src=\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/How-to-get-more-referrals-and-grow-your-business.jpg\" alt=\"\" class=\"wp-image-29015\"\/><\/a><\/figure>\n\n\n\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><h2>Table of contents<\/h2><ul><li><a href=\"#h-impact-of-referrals\" data-level=\"2\">Impact of referrals\u00a0<\/a><\/li><li><a href=\"#h-3-reasons-why-referrals-work\" data-level=\"2\">3 reasons why referrals work\u00a0<\/a><ul><li><a href=\"#h-1-customer-referrals-are-low-cost\" data-level=\"3\">1. Customer referrals are low-cost<\/a><\/li><li><a href=\"#h-2-customer-referrals-lead-to-more-trust\" data-level=\"3\">2. Customer referrals lead to more trust<\/a><\/li><li><a href=\"#h-3-customer-referrals-create-a-virtuous-cycle\" data-level=\"3\">3. Customer referrals create a virtuous cycle<\/a><\/li><\/ul><\/li><li><a href=\"#h-creating-an-effective-referral-marketing-process\" data-level=\"2\">Creating an effective referral marketing process<\/a><ul><li><a href=\"#h-deliver-fantastic-customer-experiences\" data-level=\"3\">Deliver fantastic customer experiences\u00a0<\/a><\/li><li><a href=\"#h-reach-out-to-your-customers-at-the-right-time\" data-level=\"3\">Reach out to your customers at the right time\u00a0<\/a><\/li><li><a href=\"#h-offer-an-incentive-to-your-customers-to-refer-your-business\" data-level=\"3\">Offer an incentive to your customers to refer your business\u00a0<\/a><\/li><li><a href=\"#h-make-the-process-easy\" data-level=\"3\">Make the process easy\u00a0<\/a><\/li><\/ul><\/li><li><a href=\"#h-faqs-about-the-importance-of-referrals\" data-level=\"2\">FAQs about the importance of referrals<\/a><\/li><li><a href=\"#h-get-your-customers-to-do-your-marketing\" data-level=\"2\">Get your customers to do your marketing<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-impact-of-referrals\">Impact of referrals&nbsp;<\/h2>\n\n\n\n<p>Not sold on the importance of referrals? Here are a few numbers that might change your mind.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Customers are 4x more likely to buy when they have a recommendation from a friend (<a href=\"https:\/\/www.nielsen.com\/insights\/2013\/under-the-influence-consumer-trust-in-advertising\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Nielsen<\/a>)<\/li>\n\n\n\n<li>You can expect 16% more profits from customers who have been referred to a business. (<a href=\"https:\/\/hbr.org\/2011\/06\/why-customer-referrals-can-drive-stunning-profits\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Harvard Business Review<\/a>)&nbsp;<\/li>\n\n\n\n<li>64% of marketing executives said that word-of-mouth recommendations were the most effective form of marketing. However, only 6% of executives say that they\u2019ve mastered it. (<a href=\"https:\/\/www.forbes.com\/sites\/kimberlywhitler\/2014\/07\/17\/why-word-of-mouth-marketing-is-the-most-important-social-media\/#15a5c81954a8\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Forbes<\/a>)&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Meanwhile, trust in traditional forms of marketing is low.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>According to a study, only 3% of people trust marketers. (<a href=\"https:\/\/blog.hubspot.com\/sales\/salespeople-perception-problem\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">HubSpot<\/a>)<\/li>\n\n\n\n<li>Only 4% of customers trust ads. (<a href=\"https:\/\/adage.com\/article\/media\/marketers-media-trusts\/298221\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">American Association of Advertising Agencies<\/a>)&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>These stats tell the story: customers trust their friends and people they trust to help guide their purchase decisions significantly more than they trust typical marketing.&nbsp;<br><\/p>\n\n\n\n<p>Before we talk about how you can create a successful <a href=\"https:\/\/birdeye.com\/blog\/referral-marketing\/\">customer referral marketing<\/a> program, let\u2019s talk about what makes referrals work.&nbsp;<gwmw style=\"display:none;\"><\/gwmw><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-reasons-why-referrals-work\">3 reasons why referrals work&nbsp;<\/h2>\n\n\n\n<p>Here are 3 reasons why referrals work so well in helping businesses attract new customers.&nbsp;<br><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-customer-referrals-are-low-cost\">1. Customer referrals are low-cost<gwmw style=\"display:none;\"><gwmw style=\"display:none;\"><\/gwmw><\/gwmw><\/h3>\n\n\n\n<p>Unlike Google ads or Facebook ads, customer referrals, when done correctly, are inexpensive.&nbsp;<br><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-customer-referrals-lead-to-more-trust\">2. Customer referrals lead to more trust<gwmw style=\"display:none;\"><\/gwmw><\/h3>\n\n\n\n<p>When potential customers come to your business, they\u2019ll be more likely to trust you. After all, they know their friend or family member had a positive experience.&nbsp;<br><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-customer-referrals-create-a-virtuous-cycle\">3. Customer referrals create a virtuous cycle<gwmw style=\"display:none;\"><\/gwmw><\/h3>\n\n\n\n<p>Once your business\u2019s referral engine is working smoothly, it can lead to more and more growth. Customers who come in through referrals can, in turn, give you more referrals.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-creating-an-effective-referral-marketing-process\">Creating an effective referral marketing process<\/h2>\n\n\n\n<p>Now that you know more about the importance of referrals, here&#8217;s how you can get started with referral marketing. Here are a few steps that you can take to make sure that your referral marketing process is working effectively and attracting new customers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-deliver-fantastic-customer-experiences\">Deliver fantastic customer experiences&nbsp;<\/h3>\n\n\n\n<p>Customers don\u2019t want to recommend businesses they just feel \u201cokay\u201d about. In order to make sure that your customers want to rave about your business, take time to improve your overall operations and ensure that you\u2019re delivering a world-class <a data-type=\"URL\" data-id=\"https:\/\/birdeye.com\/blog\/customer-experience\/\" href=\"https:\/\/birdeye.com\/blog\/customer-experience\/\">customer experience<\/a>.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-reach-out-to-your-customers-at-the-right-time\">Reach out to your customers at the right time&nbsp;<\/h3>\n\n\n\n<p>Strike when the \u2018iron is hot.\u2019 If you are confident that you have provided an excellent experience to your customers (eg: feedback in the form of <a data-type=\"URL\" data-id=\"https:\/\/birdeye.com\/reviews\/\" href=\"https:\/\/birdeye.com\/reviews\/\">reviews<\/a> and <a data-type=\"URL\" data-id=\"https:\/\/birdeye.com\/surveys\/\" href=\"https:\/\/birdeye.com\/surveys\/\">survey responses),<\/a> the time is right to ask them to refer your business.\u00a0\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-offer-an-incentive-to-your-customers-to-refer-your-business\">Offer an incentive to your customers to refer your business&nbsp;<\/h3>\n\n\n\n<p>Chances are that you have tons of happy customers. The problem is that not all of them will go out of their way to refer your business within their network proactively. To help give your customers an extra push, offer an incentive in the form of a discount or a gift card (or any other item of value to the customer) for every recommendation.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-make-the-process-easy\">Make the process easy&nbsp;<\/h3>\n\n\n\n<p>If the process of giving a recommendation is too lengthy and complicated, even your most motivated customers aren\u2019t going to go through with it. Make sure you\u2019re making it easy for customers to share a referral. Give them something that they can easily share through text or email.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs-about-the-importance-of-referrals\">FAQs about the importance of referrals<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1675283718221\"><strong class=\"schema-faq-question\">What is the importance of the referral process?<\/strong> <p class=\"schema-faq-answer\">The referral process is important to every business because it brings high-quality leads at a comparatively low cost and creates a virtuous cycle of customers trusting you and bringing more people in for your business.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675283765167\"><strong class=\"schema-faq-question\">Why are client referrals so important?<\/strong> <p class=\"schema-faq-answer\">Client referrals are important because it shows your business is doing something right and that your customers are willing to trust you. Referral leads also close faster as they come from a place of trust.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675283822789\"><strong class=\"schema-faq-question\">What is the importance of referrals in healthcare?<\/strong> <p class=\"schema-faq-answer\">Leads in healthcare can be harder to close as it takes a lot of trust-building for a customer to choose a hospital, clinic, or physician. When customers reach out to you via referrals, they already trust you, which makes lead closure much easier.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675284202697\"><strong class=\"schema-faq-question\">What is the importance of documentation during referrals?<\/strong> <p class=\"schema-faq-answer\">Referrals are an exercise in trust building. Having the right documentation during referrals makes tracing them easier, rewarding customers who referred leads, and building a stronger referral process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675284241747\"><strong class=\"schema-faq-question\">Why is it important to build a database of clients\/referral sources?<\/strong> <p class=\"schema-faq-answer\">When you have a database of clients\/referral sources, you can run many successful referral campaigns and attribute revenue to the correct source for your business.<\/p> <\/div> <\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-get-your-customers-to-do-your-marketing\">Get your customers to do your marketing<\/h2>\n\n\n\n<p>Customer referrals are a great way to get more customers at a low cost. So what are you waiting for? Get started asking your customers for referrals. <\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/birdeye.com\/resources\/webinars\/grow-your-business-with-the-power-of-personal-recommendations\/\"><img decoding=\"async\" width=\"1024\" height=\"269\" src=\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-1024x269.png\" alt=\"\" class=\"wp-image-29005\" srcset=\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-1024x269.png 1024w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-300x79.png 300w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-768x201.png 768w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-1536x403.png 1536w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-810x213.png 810w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner-1140x299.png 1140w, https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Referrals-webinar-banner.png 1578w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>When you have a problem that needs solving, where do you look? Most people turn to their network. Whether you are looking for a new healthcare practice, a new car, or a realtor, you typically reach out to the people you trust &#8211; your friends, relatives, or people you know who will guide you without [&hellip;]<\/p>\n","protected":false},"author":92,"featured_media":28410,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9871],"tags":[],"class_list":["post-28406","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-referral-program"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The importance of referrals for your business | Birdeye<\/title>\n<meta name=\"description\" content=\"Learn the importance of referrals so your businesses can enable the most powerful marketing engine: your own customers. \u2713 Learn 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