Referral marketing takes advantage of the contented customers you already have to generate volumes of new leads that are ready to buy.

When it comes to your company’s marketing techniques, referral marketing is a powerful alternative to other traditional efforts. Usually, marketing requires that you invest a lot of money and think of new and creative ways to attract new customers. Referral marketing, on the other hand, allows your former and current customers to bring in new clients. This works well because your professional clients are much more likely to trust other real people who have dealt with your business than your ads. This makes referral marketing a great way to find new customers.

One of the most effective ways of referral marketing is by having customers place banner ads on their own websites. Potential customers simply have to click the banner to go to your website for more information or to make a purchase. Typically there is compensation for click-throughs or for purchases that originated from the referrer’s site. Other companies that offer products that are complimentary to yours are also good sources of referrals. You can set up an uncompensated referral program where you exchange banner ads with such companies, or you can put a more formal affiliate referral program in place.

Your sales team can also directly ask your customers for leads. They may know of other businesses that would be interested in the products and services you offer. These leads are more likely to deliver a sale for your company, so they are called warm leads. Whenever you are able to make a new customer as a result of a referral, be sure to thank your customer. This can be done with a note and a gift whose value is related to the value of the sale you made with their help.

For your business, referral marketing is one of the most lucrative ways to market. Your sales will greatly increase with less effort and expense on your part, when you start to use your own customers to generate leads. Rewarding your customers for their leads is a small price to pay for referrals that are already pre-disposed to buying your service or product.

Referral marketing programs are effective because they work with word of mouth. Your customers let other businesses know about your company and help you contact them. It is much easier to make sales this way than if you had a cold lead. This strategy lets your company benefit as your customers find new leads for you.

Ray Perry is an Internet marketing executive with more than 25 years of experience. He is the Chief Marketing Officer at Market Blazer, a small business marketing company and authorized Duct Tape Marketing coach. You can get more information about referral marketing at www.MarketBlazer.com.

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