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Where Businesses Go to Grow

Building a Growth Engine, Part 5: Referral

In the first four parts of this series, we've talked a lot about how to bring in new direct customers. These are people who heard about your business either through your marketing campaigns, or through some other kind of exposure, perhaps on your social media accounts or elsewhere on the internet. This method of acquiring customers can be quite labor-intensive, not to mention expensive, and when you factor in attrition, sometimes businesses find that they're lucky if they get any growth at all past a modest user base.
 
Where the real magic comes in with growth hacking is when your direct customers turn around and start doing your marketing for you, bringing in secondary customers through referral.
 
There are countless ways to encourage your customer base to tell their friends about how great you are, and you should definitely be creative in your approach and come up with as many unique ideas as you can. That said, here are a few basic tips to get you started:
 
  • Have a consistently good product or service. No one is going to talk about how great you are if you simply... aren't. You want to make absolutely sure that every time your customers interact with you or your product, they're having a positive experience, even if (or perhaps especially if) they're coming to you with a technical issue or a problem they've encountered. How happy your customers are is absolutely the top factor in how likely they are to recommend you to others, so make sure you're perpetually working on keeping them enthusiastically satisfied.
  • Offer incentives. The history books of viral growth are filled with stories of companies that gave a small incentive and ended up with mind-blowing returns. Perhaps the most legendary of these is PayPal, a once-tiny startup that experienced explosive growth in the early 2000s by offering cash incentives to users who signed up and referred friends. This incentive program skyrocketed PayPal into one of the world's top money transfer services, where it firmly remains today. You don't necessarily have to offer cash as your incentive, but giving your customers some kind of increased value for bringing in new customers is definitely a good way to encourage referrals.
  • Create content that is easily shareable. Whereas word-of-mouth used to be literally that - people talking face-to-face - these days most people's casual conversations happen online. By creating videos, blog posts, infographics, and other content that is easily shareable on social media, you can encourage people to pass that content on to their networks and talk about why it is they like your company. Keeping the content fun, relatable, and easy to digest gives you the greatest chance of it going viral.
 
Remember, the more customers you have who are referring new customers, the less effort and money you have to spend on acquiring those customers yourself, and the closer you'll get to reaching the essential profitability threshold. Next time, in the final part of this series, we'll tackle exactly what that profitability means to your business: revenue.
 
Cogo Interactive is an award-winning digital marketing agency specializing in online marketing strategyweb designSEO and social media marketing. We work with clients in Virginia, Maryland, Washington, DC and across the nation.
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