Value of Referrals

This week a few of my friends and I were referred to a fitness center, with the holidays right around the corner we thought it was a good time to start a new fitness program. We scheduled an orientation appointment at the center that was suggested to us and agreed to sign up for a membership. The person that had referred us was with us, so obviously being in the sales and marketing business I asked the representative what our friend would get for referring us to them. His response, "I can give him a water bottle."

This response floored me, I could not believe that this fitness center had no referral program. A water bottle? I can go to a discount store and purchase one for under $5.00 yet this person brought them new business and it cost them no money. They didn't pay for an advertisement, they hadn't sent us a mailing, so their outgoing costs for this new business was null. Because of the referral of a current customer they had over $300 laying on the desk and two people signing membership agreements.

Referrals are the most powerful form of marketing that you can use and it's also the least expensive. Your referrals have more of an impact than any other marketing strategy or advertisement. Have you looked at your referral program lately? Perhaps it's time to evaluate and calculate the value of your referrals and develop a program that rewards current clients and customers for sending you new business.

Make it worth their time. Be creative, be generous, and be reliable. Make sure what you offer has value to your customers. If a customer thinks enough of you to refer someone, show your appreciation promptly and generously - don't offer them a water bottle.