The Objectives of a Referral Marketing Strategy

Every business owner and sales professional I know wants more referrals! That's why we need an intentional Referral Marketing Strategy. But what are the objectives of a Referral Marketing Strategy? We all know that the end result is to receive more referrals but there are several strategic objectives in a Referral Marketing Strategy. An illustration that helps me visualize this is the Loyalty Ladder. Here's what it looks like.

Raving Fans

There are 5 objectives that we are working on in a Referral Marketing Strategy.
  1. Turn Prospects into First-Time Buyers.
  2. Turn First-Time Buyers into Repeat Buyers.
  3. Turn Repeat Buyers into Members of our "tribe" or community.
  4. Turn Members into Advocates for our products or services.
  5. Ultimately, to turn Advocates into Raving Fans who can't stop talking about our products or services.
Raving Fans are the ones who generate the referrals for our business. These are the ones we want to be touching on a regular basis (e.g. once every 4-6 weeks) to add value, to affirm, and to educate on how to spot a good referral for us. And then when the referral arrives we should take the utmost care with that referral and treat them as well (if not better) than we treated our Raving Fan (referral source.) We should also express our appreciation to our Raving Fan for the incredible compliment they have given to us by referring someone they know. Advocates are the ones who are likely to become Raving Fans and excellent referral sources for us. The key with them is to continue exceeding expectations and to make them conscious of how they can help you (e.g. a testimonial, a review, and a referral.) Members are the ones who are likely to remain loyal but who are not at a motivation level yet to advocate for you. The key with them is to listen to their feedback, to meet their expectations, and then to go one step beyond and exceed their expectations. As you do this you express how much you value them as your customer and you start looking for the signals that they might be ready to advocate for you. Of course you want to continue turning prospects into customers and customers into members, but the 3 most important groups to a powerful referral system are your Members, your Advocates, and your Raving Fans. Make a list of each of these 3 groups right now and set some action steps you will take to start moving them up the Loyalty Ladder. As a business coach serving business owners and sales professionals in Sugar Land, Katy, and the Houston area I thoroughly enjoy watching my clients become raving fans. To read what some of my advocates and raving fans are saying see these reviews. I would be honored to help you create a transformational Referral Marketing Strategy to grow your business!

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6 Responses to “The Objectives of a Referral Marketing Strategy”

  1. Great article, Glenn. These concepts have really helped me build a better business, and continue to grow in a tough economy.

  2. Dag Nybo says:

    Excellent, well developed yet simple enough to implement.

    Thanks, Glenn

    • Glenn says:

      Thanks Dag for your kind words. I have found it very easy to implement myself. I hope others will too. I appreciate your comment.

  3. Alan Furst says:

    Powerful information in a quick-to-grasp graphic. . . Thanks for posting, Glenn!