Restaurants and small businesses operate with finer margins than lots of other business models, and finding the right marketing strategy to get customers coming through your doors with a solid ROI for your efforts is crucial. The last 12 months have shed light on the importance and value of those customers perhaps more than ever before, and implementing a referral marketing strategy can be a game changer for rewarding your loyal customer-base.
As COVID-19 has created massive shifts in the way that businesses operate, it has forced many of us to reevaluate our marketing efforts and costs so that we can keep up with the changing times. Traditional coupons and neighborhood mailers come with high up front costs and a lot of legwork to manage, but adapting your strategy to include digital and referral marketing can bolster customer loyalty in uncertain times (and with a far higher ROI).
What is word of mouth marketing or referral marketing?
Referral marketing is a marketing tactic that capitalizes on recommendations and word of mouth to grow and retain your customer base. Your network of existing customers are at the heart of the strategy, and the goal is to reward customers for spreading the good word about your business to their friends and families to get more people through your doors.
How can referral marketing help my business?
Implementing a referral marketing strategy can help grow your customer base, increase loyalty, and provide a wonderful way to reward your most vocal customers. Studies have shown that the benefits of word of mouth marketing are pretty staggering. For example:
- Customers from referrals have a 37% higher retention rate
- 92% of people trust recommendations from friends and family over any other type of advertising
Referral marketing can save a lot of hassle for you as well, which is a huge factor to consider. Organizing mailers and discounts is costly and a massive time sink, and it can be near impossible to track your return on investment. With referral marketing solutions you can track each and every marketing effort from start to finish. You’ll be able to see who referred who, who your most vocal customers are, and how much revenue they’re generating for you. Then, you can engage with them and reward them for all the good things they’re doing!
What does a referral marketing strategy involve?
Creating a successful strategy will vary slightly depending on your business’ circumstances, though it will likely involve:
- Setting goals
- Importing your current customer base and welcoming customers
- Creating campaigns and watching your customers redeem their discounts
- Tracking your efforts, promoters, and ROI, and analyzing the results
The good news is that this doesn’t cost an arm and a leg. There are programs out there— like Check This Out— that are online solutions that don’t require you to buy a load of new equipment or pay staggering up front costs. With Check This Out, you pay a small set up fee and after that you will only be charged $0.30 for each $1 of discount value when a discount is activated. This minimizes the risk of taking on a new marketing effort, since you only pay when a discount is activated!
Times are changing, and it’s been hard for any of us to know what our businesses will look like in three, six, or 12 months. As the times change, customers are looking to what they know and trust, and referrals are more important than ever. Implementing a word of mouth marketing strategy is a great way to amplify your marketing efforts and reward your biggest fans in a hassle-free, highly trackable way.
If you run a small business or restaurant and are looking for ways to increase customer acquisition and retention, we’d love to help you build out a successful referral marketing strategy. We know how daunting it can be to change your marketing strategy in uneasy times, and we’re here to help. Contact us today to get a demo.