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Referral Marketing: Tools & Strategies

Instructor: Tara Schofield
Word-of-mouth marketing (a form of referral marketing) can be a substantial boost to the awareness and sales of a company. Learn how to boost referral marketing for your company.

What is Referral Marketing?

Referral marketing is an effective way for people to learn about your product or service from a trusted friend, colleague, or family member. Think about the last time you told someone about great service, a good deal, or a new find. Each time you tell someone about your experience and make a recommendation, you are using word-of-mouth marketing, a form of referral marketing.

Imagine you just discovered a new, amazing Mexican restaurant that serves incredible food. You go to work the next morning and tell your co-workers about this great new restaurant. You tell them how you found the restaurant, what you ate, and how excited you are to return. Because of your recommendation, your colleagues plan to try this restaurant next weekend. Success!

What Tools are Needed?

The main objective in referral marketing is to make the experience positive, ensuring the information shared is favorable. This requires staff training in how to offer excellent service and also requires quality products at fair prices. Unfortunately, word-of-mouth marketing can also be negative. If you have an unpleasant experience with a business, you are even more likely to share that experience with others. In this instance, the referral marketing may prompt you to never patronize that business.

For instance, if that Mexican food restaurant had been slow to provide service and the food was sub-par, your co-worker likely would have said he would not go to that restaurant and may tell others about your negative feedback.

Beyond training, you need to repeatedly monitor service and delivery at your business to keep your standards high and to continue the flow of positive responses from your customers.

In terms of tools, you may need a system to track referrals or keep records for benefits offered to customers, based on the strategies presented below.

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