Referral marketing, a tactic that relies on word of mouth and recommendations to gain new business, is one of the most effective forms of marketing out there, and especially so for local businesses.
Did you know that over 60% of marketers claim that referral programs generate high volumes of leads? By harnessing the experience and enthusiasm of your local community, you can quickly build your company into a beloved local brand.
This increased brand recognition can also lead to some more direct benefits for your business. Leads generated via referrals are 36x more valuable than a lead generated by a cold call, 10x more valuable than a trade show lead, and 4x more valuable than a web lead.
In this article, we’ll look a little deeper into how leads from referral programs can benefit your business, and then show you how to use them effectively.
The benefits of referral marketing
There is a clear and obvious reason why so many successful businesses use referral marketing: it works. In fact, nearly 80% of marketers claim that referral marketing generates good to excellent quality leads, and represents the second-highest source of quality leads overall.
For businesses looking to market within local communities, referral programs can be even more effective. The impact of referrals is increased when used for small businesses because a positive review from a trusted friend within a customers’ community is a far more effective way to establish trust than a cold call.