How To Create A Word-Of-Mouth Referral Network

The most effective sales team you\'ll ever find is enthusiastic customers. The reason is simple enough: Customers aren\'t paid to praise. When a customer becomes a passionate believer in your brand, it means you truly earned it. Whenever they buy your product or service, customers feel like special club members.

But a repeat customer alone doesn\'t create a sales team. The trick is to transform that dedicated buyer into a promoter who spreads the word and converts friends, family and associates into customers, too. By building great word-of-mouth, you nurture an all-volunteer sales force that generates leads, boosts sales and leverages marketing dollars. Here are three basic ways to persuade people to talk up your business story. As you develop the customer sales force, you\'ll find other options suited to your business.

1. Set Up a Referral Program

The easiest starting point is to ask customers who are already fans to recommend you. First, let them know you\'re creating a referral program by sending out a letter or a postcard that explains how much you value their business and that your continued quality depends on their referrals. You\'ll get a better response if you include an incentive - say, a discount on the next order or a gift for every referral sent your way.

To keep building advocates, send your referral program letter to every new customer within a few days of his first purchase. You might also ask for written testimonials about your products, which can be included on direct mail postcards, mailers or brochures or posted on your website and included in e-mail marketing. Send these testimonials to targeted customer lists, along with your appropriate sales materials.

Customer referrals can also be mailed to prospects to help open doors or to introduce you to important contacts. For instance: \"Tom Smith thought you\'d want to see this.\" Then follow up with phone calls.

Once you have set up the referral program, Business Contact Manager for Outlook 2003 lets you to track the referrals. Each Business Contact or Account listing has a Referred By field that you can use to quickly identify the source of the referral, whether by advertisement, direct mail, seminar, trade show, internal referral, external referral, partner or public relations.

In addition, the Source of Leads Report in Business Contact Manager quickly gives you insight into customers you\'ll want to contact. This pre-formatted report lists all of your Accounts and Business Contacts, grouped by how they were referred, whether by advertisement, direct mail, seminar, trade show, internal referral, external referral, partner or public relations.

2. Elevate Your Profile

Whether you sell upmarket services or mass-market widgets, you can generate positive publicity to make your company stand out - although it takes some sustained effort to build recognition.

As a professional service, you can position yourself as the go-to authority for media or industry news reporters. That requires some investment in crafting an innovative speech or survey or advocacy position that gets you noticed on the conference or trade show circuit. You might also hire a publicist to help get exposure. Such pros are often paid on a per-project or per-performance basis so you aren\'t on the hook for hefty retainer fees.

Or, you can publicize on your own - for instance by highlighting your family\'s background or its homegrown recipes. Your goal is to weave an emotional story or hook that will draw press.

You can also become identified with a cause or a charity. Ben & Jerry\'s Ice Cream, for instance, was founded on only (USD)$12,000 back in 1978. But the two owners created a national powerhouse out of high-priced unconventional flavors and the good will of philanthropy. Before that, few companies talked about social responsibility. Nowadays, hundreds do.

Either way, the important thing here is to be sincere. Promote only what you really believe in. To begin building publicity, create a personal and company media kit, which can be quickly done with Microsoft Publisher.

3. Choose Smart Partners

By forging alliances with businesses that target the same customers as you do, you\'ll create a word-of-mouth customer network that refers business. For instance, if you\'re a pediatrician, you might leave your business cards at the reception area of a local daycare center. Likewise, the center might put up some posters on your office bulletin board. A parent who uses daycare services might recommend you to another.

Or, let\'s say you own an auto body shop. You can partner with a car wash/detailing service. The car wash might mail out your flyers along with monthly invoices and also place a stack of flyers on the counter for customers. You obviously do likewise. Take-out delis and caterers provide another matching combo. You get the idea.

You can also develop special arrangements with partners to offer discounts or special offers - printed on the back of the flyers - that are only available to customers who patronize both businesses.

Don\'t forget your suppliers and vendors. Ask them to recommend you to their customers. Remind them that by referring sales leads or business to you, you\'re helping to build their business, too. To make it work, you must return the favor.

Experts say that customer referrals and word-of-mouth are about 10 times more effective than other marketing.

Joanna L. Krotz writes about small-business marketing and management issues. She is the co-author of the \"Microsoft Small Business Kit\" and runs Muse2Muse Productions, a New York City-based custom publisher.

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