Growing Your Business Through Customer Referrals

A strong customer base is something that small businesses always try to develop. Regardless of the methods that are used, it is hard for them to gather a lot of new clients. Marketing methods that are varied can be one of these techniques. Another one would be cold calling your target client. You can even use direct mailings to potential client’s homes. However there is an untapped resource that small businesses don't take advantage of. They fail to recognize the potential of the current customer referral.

Customer referrals, if used in the correct manner, can become the backbone for your business development plan. Current customers who are pleased with your business can be your best form of advertising. Finding a way to generate referrals out of your customer base can allow you to grow your new customer base drastically more than you have in the past. An efficient method to do this can often be the difficult part to figure out.

You can efficiently generate current customer referrals in a few different ways if you think of them. If a current customer of yours refers a new customer, you can offer a bonus or special offer to them as a reward. The perk can be given to the referrer and the referred. You can offer your existing customer a $10 bonus, for example, while offering the same bonus to the person they are referring. This method invokes some added costs, which is really the only draw back.

However you must weight what the normal cost of a new customer is to you. What was the amount of time you used to get this new client? How much marketing was required to bring them in? Both the time you spend and the marketing you develop cost you money. Often times this money will add up to be equal or greater than that of offering a referral bonus. A happy new customer is one benefit of a referral bonus and so is the fact that you are making your current customer happy as well.

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