Most individuals turn to the people they know and trust when they are looking for advice on which car to buy, medical aid provider to use, or even where to eat out on the weekend. They do this, because friends, relatives and trusted associates will give them a recommendation that is unbiased and based on their personal experiences. The people whose opinion we trust, are endorsing the companies that they have had good experiences with, and hence the influence and substance of customer referrals cannot be denied. It is an incredibly powerful tool to gain new customers, and to do this without having to spend a cent of the marketing budget.
So says Heinrich Swanepoel, business development manager at PaySpace, a leader in payroll and human capital management software, adding that through word of mouth, organisations can kick start the most powerful marketing channel they have, the positive experiences of their customers. “In fact, researchers Nielsen revealed that people are four times more likely to buy from you, when your company has been recommended by a friend of theirs.”
He says there are several compelling reasons why customer referrals are so effective. “They are low-cost. Unlike advertising and other marketing campaigns, they cost nothing. For businesses of all sizes, and in every industry, it is important to understand what the true cost per lead is, or the total amount of money it takes for a company to generate one lead. A lead is an individual who has the potential to become a customer in the future, and many leads discover your business through marketing channels.”
However, Swanepoel says with word of mouth, the closing cycle is shortened, and the cost of marketing is reduced. “There’s a lot more initial trust in the brand, which increases the closing rate. Because customers who give referrals have nothing to gain by doing so, they have passed the trust on, which has a snowball effect, and builds a lot of credibility and loyalty to the brand.” After all, he says that when a potential customer comes to your company, they are more likely to trust you, because they know a friend or family member had a really good experience with your brand.
Next, he says customer referrals create a positive cycle, which leads to more and more growth over time. “Customers who choose your business based on a referral, are more likely to give your business a referral in the future.”
Speaking of the best way to get more customer referrals, Swanepoel says the starting point is identifying your company’s mission, and then living up to that mission. “For example, at PaySpace our mission is to improve lives through technology and provide world-class support.” If you deliver on that, you will naturally get more referrals. If a customer is proud of the technology and is benefiting from it, they will happily give a referral, he explains. “Remember, if your business isn’t growing, it is dying, and if it’s growing, referrals will follow organically.”
Leading on from this point, Swanepoel says that to get referrals, your business needs to deliver top-notch customer experiences. “No one will recommend a company that gives them average service, so make sure that you exceed all your customers’ expectations.” Also, he says when asking for a referral, strike while the proverbial iron is hot. “If you know you have given world-class customer service, don’t be shy to ask for a referral, and make sure the process isn’t long and complicated, or it will put people off. Make it simple and easy for them, such as a text message or email.”
Finally, Swanepoel advises not to be afraid. “People tend to think you can only ask for a referral after they’ve gone live, and after they’ve had a good experience. This isn’t the case. You are constantly setting the scene and giving a good experience throughout the buying cycle from start to finish. The experience is there, so ask for a referral upfront, even when you’re taking the order.” There’s no time like the present, he says.
“Understand your core proposition and live up to it. Customer referrals are a great way to bring more customers on board, and at no cost. Don’t wait, start asking your customers for referrals today.”
PaySpace is a true cloud-based HR and Payroll solution established in 2000. As one of the brands that fall under the Insight IT Group umbrella, PaySpace is the leader in online Payroll and HR solutions and services across Africa and abroad. With an integrated, real-time, SQL platform offering unified HR, payroll and Human Capital Management (HCM) across 40 African countries, PaySpace offers embedded analytics, manager and employee self-service, therefore, enabling businesses of all sizes to run a fully tax and legislative compliant, ISO/IEC certified, cloud-based people management solution.
PaySpace is the only HR and Payroll solution in Africa with International Organisation for Standardisation (ISO) 27001 certification, a testament to PaySpace’s commitment to safe and secure protection of data. PaySpace was awarded 2019 Payroll Software Supplier of the Year at the Global Payroll Awards in addition to achieving the 2019 Top 25 HR Software Award via The Software Report.