we-heart-referralsSince this is the month of LUV, let’s talk about why we love getting referrals.

Getting a referral is like receiving a stamp of approval for all the hard work you’ve done. It sure does feel good!

However, aside from the warm and fuzzy of this experience, let’s take a look at the 7 most important reasons why you should be build your business using referral marketing:

1. Referrals Are Cost-Effective

In most cases, referral are much more cost-effective than any other form of marketing. They cost very little if anything at all! In the world of skyrocketing advertising costs and slugging economy, this is a very nice thing to have.

2. Referrals Are Better Clients

New clients that you have acquired by the way of referrals tend to be much better clients. They are less demanding, more appreciative of your work, and they are tend to be nicer people to be around. By focusing on referral marketing, you can “engineer” the type of people you want to attract to your business.

3. Referrals Are Predisposed To Buy

If someone was referred to you, chances are they have already been looking for your product or service. They are in the market. They need and want your product or service, right now.

4. Referrals Are Less Skeptical

When someone refers business to you, they provide an endorsement (either explicit or implicit) of you as a professional. This is the critical element of social proof that makes the selling process so much easier. When you focus on building your business via referrals, you don’t have to overcome as many objections and your closing ratio goes up.

5. Referrals Pay More

The people that have been referred to you by someone are not as price-sensitive as the other types of prospects. The price someone is willing to pay is in direct proportion to the amount of risk they see in the deal.

6. Referrals Are More Loyal

Clients that have been referred to you will tend to keep buying your product, or doing business with you as a professional, for a longer time than the clients you acquire through advertising.

7. Referrals Are More Likely To Give Referrals

This is something that most business owners never think about yet is possibly the most important item on this list. When someone gets referred to you and becomes a client, he or she will think that giving you referral is “normal”. As a result, they will be a lot more likely to give you referrals than the rest of your clients would.

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