The Value of Referrals
Referrals are an extremely valuable form of marketing that pose many benefits for your business – particularly for those in the property industry. At the end of the day, buying property or land is a huge purchase decision, that proves stressful for many individuals.
Many first home buyer purchasers looking to build are likely to be more comfortable employing your services if you have come recommended by a trusted friend or relative. Referrals have the potential to not only increase your leads, but also reduce costs, accelerate processes and increase sales.
Filtering through the plethora of information on the effectiveness of referrals can prove a tiresome task. Property Republic have compiled nine of the most hard-hitting statistics on the value of referrals from international marketing surveys and reports for your convenience:
87% of frontlines sales representatives, 82% of sales leaders, and 78% of marketers surveyed by Heinz Marketing agree that referrals are the best leads your business can get. – Heinz Marketing
92% of consumers trust referrals from people they know – Nielsen
People are 4 times more likely to buy a service or product when referred by a friend – Nielsen
77% of consumers are more likely to buy a new product when learning about it from friends or family – Nielsen
84% of consumers say they either completely or somewhat trust recommendations from family, colleagues and friends about products. This makes referrals the source of information ranked highest for trustworthiness. – Nielsen
The Lifetime Value for a new referral customer is 16% higher than non-referrals – Wharton School of Business
Consumers rely on word-of-mouth anywhere from two-times to 10-times more than paid media – Boston Consulting Group
Word-of-mouth is the major element that drives 20% to 50% of all purchasing decisions. – McKinsey
Word-of-mouth marketing has been proven to improve marketing success by up to 54%. – MarketShare
So now that you’ve got the statistics on how referrals influence buyers’ purchasing decisions, it’s time to consider the benefits that word-of-mouth marketing can provide your business. Sustaining a referral dynamic within your client community helps your brand to surpass linear growth.
This means, that instead of growing at a rate of one new client at a time, the referral process creates the potential for exponential growth.
A single satisfied client willing to recommend your services can result in two new leads.
Two impressed clients can initiate four leads and so on; generating a snow-ball effect for your brand’s market influence. Perhaps the most obvious benefit of referrals for your business is reduced cost. Word-of-mouth marketing requires absolutely no financial expenditure, making it the most cost-effective marketing approach to invest in. Generally, the sales process for referred customers moves faster than that of non-referred customers.
This is because of the borrowed trust, or borrowed influence, your brand has gained from the referral of a previous client whom this new prospect trusts.
This higher level of trust means these new purchasers are already predisposed to working with you. Once again, the borrowed influence you have gained from a referral makes closing the sale a lot easier.
This is because the level of trust this new buyer has for your brand begins higher than that of non-referred clients. Higher trust ratios mean higher sales ratios.
How can you get more referrals?
Recommendations only occur when clients experience exceptional service.
People are only likely to refer your brand to a friend or family member if they were genuinely impressed by your services.
This means that you must offer your clients an extraordinary experience if you are looking to generate and perpetuate a word-of-mouth dynamic among your target market. Happy customers a likely to refer you without having to be asked or reminded. Property Republic understand the value not only of referrals, but of delivering an exceptional customer experience.
If your brand requires assistance in improving and enhancing client services, the team at Property Republic can help. Get in touch today!