A business can be a lot like an octopus. Think about it, you’ve got a bunch of feelers out there trying to rope in customers. You use social media, email marketing, referrals, print advertisements, promotional specials, you name it, all with the goal of trying to grab new consumers. Now, can you tell me which tactic (or tentacle) has been bringing in the most customers? If you can, awesome! If you can’t, you’ve got a problem.
We’ve already stressed how important it is to track all your marketing efforts, how it helps you optimize to attract new customers and to properly manage your marketing budget. Let’s focus now on tracking a marketing effort that 90% of consumers trust in - customer referrals. If you’re not tracking your customer referrals, you’re missing out on big opportunities. Here’s why.
1. Helps Gauge Overall Customer Satisfaction
Companies shell out big bucks to figure out one thing - are their customers happy? Simply recording and keeping track of your customer referral numbers is a great first indicator for that. Have you ever recommended your friend to try out a business that you didn’t like? Of course not. Consumers only refer friends to businesses that they themselves enjoy. So, by keeping track of your customer referral numbers you can get a rough gauge on how the overall customer satisfaction level is at your business.
If you’re experiencing a high number of customer referrals then you know you’ve got a bunch of happy, satisfied customers. If you notice little to no incoming customer referrals, well, that could mean two things:
1. customers feel indifferent about your business
2. customers aren’t really happy with your business
From this valuable knowledge, you can start making changes to either maintain or improve aspects of your business or services.
2. Helps Gauge Overall Customer Loyalty
You don’t want customers to feel indifferent about your business. Ideally, you want them to be enthusiastic, to trust your judgements... to be loyal. On average, it costs businesses about 6 times more to acquire new customers. In addition to that, repeat customers typically spend anywhere from 6-10 times more than new customers do. So, considering it costs less to retain current customers and they typically spend more at your business, breeding a strong sense of customer loyalty should be a priority.
Since customer loyalty is such a vital part to a successful business, it’s probably not a bad idea to gauge your customer loyalty and determine how you’re actually doing on that front. One of the best ways to do so is to simply track your customer referral numbers. Customers that are impartial about your services are not going to refer you to a friend, but a loyal customer will. You can get some valuable insight into how loyal your customers truly are to your business based on how high your customer referral stats are.
3. Know With Certainty What Marketing Efforts to Invest In
Most small businesses don’t have the funds to just throw around like they’re nothing, especially when it comes to marketing. That’s why knowing with more certainty where to invest your marketing funds is so essential. You want to make sure you’re getting the best bang for your buck. Here are two ideas to help you do just that:
1. Create a Referral System: If your referral numbers aren’t where you’d like them to be, you can act. Create a referral process at your business. Setup a simple system that rewards clients for referring friends to your business. For example, if a client refers a friend perhaps their next visit is half off. A little extra incentive can help your referrals and overall revenue soar.
2. Creating a Loyalty Program: If referral numbers are low, that could be directly connected to a low level of customer. In order to bolster and promote strong customer loyalty, you might consider establishing some sort of loyalty program at your business. Some ideas you could consider are punch cards, point systems, and tiered rewards. These type of promotions give customers incentives to be loyal to your business and keep coming back. The more times they attend your business, the more punches or points they rack up toward receiving some sort of designated special or reward. Consumers have a motivation to be loyal to your business.
Have you always wanted to track your marketing efforts, but just never had the time? Check out how to turn tracking your marketing efforts into a quick and easy process.
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