Hey everybody Mike here from Black Dog Education where we teach business
owners how to build, maintain, and market their own fully search engine optimized websites
and I'm glad that you are here. So in today's video we are going to talk about referral
programs and I love referral programs I really think that every business should have an official
referral program, and if you don't at least take a couple minutes and really kind of think
about it and see if that makes sense for your business so what a referral program does is
it incentivizes your existing customer base to basically talk about you and how cool your
services are now they are probably are already doing that anyway because if they don't like
your service then they probably wouldn't be with you anymore but this is just kind of
an official way to really show them some respect and the fact that you appreciate them talking
about you so it can be something like you know if you refer a friend I'll give you a
free overnight pet sit or I'll give 20% of something, something, something, next month.
It doesn't really matter what the incentive is it's just the fact that you're showing
a level of appreciation now again some of your customers again probably already do this
but the problem with word-of-mouth is that it's not consistent it's hard to relying on
so as a business owner what we want to be able to do it put systems in place to keep
the ball rolling it would be great if you can count on a certain level of referrals
every month so there's 3 reasons why I really like referral programs and we are going to
talk about those right now the first reason I really like referral programs is because
you have increased trust immediately so the way this works is that people feel more comfortable
with the service provider or product if they get a referral from somebody that they already
know so what you're doing is you're piggybacking off of their existing relationships so it
looks something like this so I like Bob and Bob likes you and therefore I am probably
going to like you and we want to be able to take advantage of that piggyback off of that
existing relationship and use that trust. The second reason I like referral programs
is because referred customers are typically less price sensitive. So think of something
like this when you come into a relationship with a customer they call you on the phone
you meet him at his office, whatever the case is, when you start talking to them before
they know the value that you provide it really becomes a matter of price. I get this all
the time with web stuff, people go I've got a kid down the street that can do it for half
the price exactly because they don't know the value that we bring. They don't know the
value you bring but what happened is that when you have your customers bringing these
referrals they've already been chatting you up so they see the value of your service that
means that you're not going to have to dip your prices or offering discounts to get that
person's foot in the door at the great thing for a business owner and the third reason
why I really like referral programs is because they produce better customers I mean really
referred customers are has better people, I'm just kidding they're not better people
but studies have shown that referred customers will not only give you a higher retention
rate they'll stick around longer they also have higher initial cost structures so initially
the rates are little bit higher but there was a study done last year at the Wharton
school which is the business school for University Pennsylvania where they showed that referred
customer lifetime value was about 16% higher than a non-referred customer so that means
you know if you have you have a customer good for $1000 a year a referred customer in a
similar situation would be worth 1160 I don't know about you but I can always use an extra
16% okay so if you don't already have a referral program in place I would I would ask you to
just take a couple of minutes and really think about it and see if that something that you
can get your customers could get behind again increase that word-of-mouth marketing because
those people and gold, they are ready to rock 'n roll when they call you. It's as simple
as that, so on behalf of Black Dog Education and Pet Sitter Marketing I want to say thank
you for stopping by be sure to check out Pet Sitter Marketing on Facebook, it's just Facebook.com/PetSitterMarketing
for more news, tips, and information to help jumpstart your pet sitting business. Again
this is Mike Linville from Black Dog Education saying thank you and happy sitting. }