By Richard Rutigliano, PriMedia, Inc.
According to Gray, Gray & Gray’s 2017 Energy Industry Survey, published in last month’s Oil & Energy, 39% of our industry’s new business comes from customer referrals. That’s more than any other source, including … yes, digital marketing, which came in second at 22%, and traditional marketing, in third with 19%.
Now before you start shouting, “I told you so” at your marketing agency, consider that if you combine the totals for digital and traditional marketing, you get 41%, which is just about the same percentage accounted for by customer referrals. I point this out not simply to defend the value of marketing services (which, the survey indicates, our industry already understands), but rather to elucidate how marketing and customer referrals are increasingly, inseparably interconnected.
It’s long been said that customer referrals are the original form of marketing. As such, advertising agencies often try to imitate the voice of the satisfied customer, or even incorporate their kind words into marketing materials, in an attempt to recreate the timeless “water cooler chat” — that friendly recommendation which so casually, but effectively, builds excitement about a new business, product or service.
Many companies still consider “word-of-mouth” referrals the primary driver of new business. But let’s think about that phrase, “word of mouth,” and what it really means in 2017. Where do you think most customers — especially the younger, more outspoken customers — make recommendations to their friends, family and coworkers today? Is it a block party or a retweet, an after-work rendezvous or an online review?
No doubt, literal word-of-mouth referrals still occur, but as more and more customers use the web to research and purchase fuels and home comfort services, so too do these customers use the web to “voice” their opinions about the providers of these products and services. That means you! The good news is you can use this development to your advantage, making it easier for your customers to recommend your business by making the referral process itself a more integrated and profitable part of your customer communications.
Word Of Mouth, Meet Voice Of Reason
Let’s say you want to drum up more referral business and reward those existing customers who consistently send new customers your way, so you come up with the bright idea to launch a referral program. A basic version of such a program might offer a $50 company credit to the referring customer for each referral customer who signs up for automatic delivery or a service plan, and the same credit to the new customer.
Seems straightforward enough … but how do you keep track of the referring and referral customers? One smart place to start is with a clean, secure, and easy-to-use referral form that lives on a specific page of your website.
This page should outline the basic terms, conditions and benefits of your referral program in a way that is both on-brand, or reflective of your company messaging, and sticky, or sharable. After all, the whole purpose of this page is to attract new business, so you want it to be seen and used by as many people in your service area as possible (more on the social sharing aspects of your referral program a little later on).
To that end, try to be upfront and transparent with your customers about how the referral program works and what they can get out of it. Think about who your ideal customers are, and craft your message as if you’re speaking directly to them. Using a sales pitch like, “We love our customers,” is fine so long as you actually live and breathe that philosophy and have made it an inextricable part of your company culture and brand.
If it seems tough getting your message just right, that’s because it is. This is why marketing agencies exist in the first place — to help you get in the mindset of your existing and potential customers. A referral program is most likely to succeed when it is seamlessly integrated into your customer communications. At that point, your customers won’t even have to think about participating. It will be a no-brainer.
The real nuts and bolts of your online referral program are the aforementioned referral form and its integration into your back-office software. Like your messaging, the form itself should be straightforward and to-the-point. You need to know the names, addresses, phone numbers, and emails of the referring and referral customers. Maybe add in an empty field for some brief comments, so you can get an idea of what the new customer needs, but limit the character length; you want a solid lead, not a life story.
It’s also smart to make the referral form multifunctional; that is, built in such a way that it’s usable by either the referrer (the existing customer) or the person being referred (the potential customer). From the user’s perspective, this should be as simple as clicking a tab that says, “Make a Referral,” or tapping a button that says, “Become a Customer.” The forms will be virtually identical; in both cases, you just need the name and contact info of the referrer and the person being referred.
You could theoretically use the “Become a Customer” tab to gather all of the data you’re going to need to run a credit check and create a new customer account. However, if you do this on a referral page, you might soon discover that this page is coming up with a very high bounce rate, indicating that your potential referral customers aren’t willing to spend the time to fill out the whole form, or just don’t have all the information you need on hand at the moment.
Thus, for the purposes of a successful referral program, it’s probably safer to use the referral page’s “Become a Customer” form strictly to generate new-customer leads. That being said, it is imperative that you have your referral form integrated directly into your back-office lead tracking software.
A comprehensive lead tracking solution like PriMedia’s LeadPro can be connected to your customer-facing website, so that a referral form completion either automatically generates a new customer lead or instantly pings your sales manager to enter the new lead info into the system.
Plus, just as a responsive web design will allow your referring or referral customer to complete the form on any smartphone or mobile device, LeadPro’s secure Cloud-based system allows your team to add and track the lead from any connected smart device in the field. Best of all, this happens in real time, so you can access the data as soon as it’s entered into the system and follow up on it immediately.
Earn Your Stripes
This brings us back to the social sharing aspect of today’s customer referrals. When you think about it, referral programs are essentially tailor-made for social media, because both are all about sharing. With that in mind, you definitely want the content and design of your referral program webpage to be up-to-date and social-media-friendly.
If you use social networks like Facebook, Twitter, Instagram and Google+, then icons linked to your accounts should be displayed prominently on the referral program page (if not built into the referral form itself).
Additionally, you may find success in plugging your referral program via “Boosted” Facebook posts, Promoted Tweets and Instagram Ads. Advertising costs vary across the different networks, so talk to your marketing agency about putting together a social media marketing campaign that will connect with your followers and others.
Promoted posts have a wide reach, but dropping a line about (and a link to) your referral program in the comments of a relevant post can help forge real relationships and will show potential customers that your company is attentive, responsive and engaging. Just try to avoid generic responses that might make it sound like your social media activities are automated. You want real leads, so be authentic.
The same applies when dealing with online review sites, another platform that can complement your referral program. Customers who leave highly positive reviews on Google My Business, Facebook, Yelp, Angie’s List and other sites often say things like, “I would gladly recommend this company to any of my friends and neighbors.”
Well, if that’s the case, then give that satisfied customer the platform to make those recommendations and get rewarded for doing so! Tell your customer you appreciate the endorsement and shoot over a link to your referral page.
Tread lightly, though — this is an unsolicited courtesy, not a sales pitch. The last thing you want to do is give the customer who volunteered a positive review a negative impression about the way you do business, so be sure to speak from the heart. Tell that customer why you appreciated that particular endorsement and what it meant to you (beyond just another opportunity to plug your referral program).
If you’ve partnered with an agency for online reputation management, explain the situation in as much detail as possible to your marketing team. This will give them the tools needed to craft the message that has the best chance of resulting in conversions (referral form completions) and eventual sales leads. Taking 5-15 minutes out of your day to get the story right could mean the difference between a lost lead and a new customer who sticks with your company for 5-15 years or more. That’s well worth the time!
Pay It Forward
One critical aspect of any referral program, which I’ve hardly touched on, is the actual referral reward — the incentive that inspires your customers to spread the word about your business. A $50 or $100 company credit is OK, but your more cynical consumer might see such rewards as just another self-serving promotion. So what else can you offer them, short of writing a check?
One solution would be to partner with another local business in your service area. Talk with the owner of that company, or have your marketing agency contact them regarding cross-promotional offers. A $50 fuel credit is nice, but a $50 gift certificate to a local restaurant buys your customers a night on the town — an experience that will stick with them.
Establishing these kinds of business partnerships isn’t always easy, so use your existing connections. If you’re a member of the local chamber of commerce, as so many heating fuel dealers are, bring this opportunity up at the next meeting, or put your marketing agency in touch with a chamber member who has already sent business your way.
In this regard, referral programs are cyclically and mutually beneficial. You do right by your customer, so that customer refers a friend to your business. The friend becomes a customer, so you reward the referrer with a gift certificate to your friend’s business. Your friend’s business gets new customers because of your referral, so your friend’s business starts referring its existing customers to your business. You do right by those new customers, so they refer their friends to your business and the cycle continues.
Larger energy and home comfort providers that are members of state and regional business associations might employ a similar strategy on a greater scale, offering rewards like prepaid gift cards redeemable at big retail chains or anywhere major credit cards are accepted, even online.
The fact is, whether you have a referral program in place or not, this is already happening in your business community. That’s why it’s called a business community! Today’s customers shop online, review businesses online, and tell their friends about those businesses online too. To be a part of that online business community, your referral program should be on a mobile-responsive website and integrated with your back-office software, as well as your company’s social media accounts and online reviews. Otherwise, it’s on the bench.
PriMedia can help you referee your referral business, with web development, social media marketing and online reputation management. To find out more, please visit the PriMedia website or give me a call at 800-796-3342.