How to boost your referral rates

by: Julie Irwin
  • 26/09/2011
  • 0
How to boost your referral rates
Word of mouth recommendations, or WOM for the uninitiated, are a primary factor behind many financial services product purchasing decisions.

Our research across many financial sectors consistently shows word of mouth recommendations are one of the biggest reasons both individual and business customers make the decisions they do, over say, advertising or direct mail, for example.

So, it’s no surprise that when we interview intermediaries, word of mouth recommendations from existing clients feature high on the list of new business generating methods. But how many are actively encouraging referrals by word of mouth (WOM)?

Why is WOM so influential?

Recommendations are often more trusted than a piece of direct mail, for example. Word of mouth recommendations are most powerful when people are making first time, one off, large or complex buying decisions. Given that mortgages are, on the whole seen as potentially complex, it follows that WOM has an extremely important influence on the purchase decisions which should be leveraged by intermediaries.

How to increase WOM activity

Just because a customer says that they are likely to recommend your product or service, does not guarantee that they actually will. Through research, we frequently measure brand advocacy i.e. the proportion of customer that say they would be likely to recommend a particular provider, product or service. However, when we ask an ancillary question “And have you recommended x (adviser/provider/product) to others?” we typically get a much lower positive response.

There are a few basic things you can do to increase WOM recommendations:
Encourage your clients to recommend your services:

Ask for recommendations; impress upon clients how important recommendations are to your business. Without a prompt, those recommendations may never happen.

When a client makes a recommendation, remember to thank them – this helps underline the importance of recommendations and encourages your client to do it again.

Stay on your client’s radar:
Make sure you stay in touch with clients to stay front of mind, otherwise WOM is less likely to happen.

• Be visible
WOM doesn’t work in isolation. In today’s digital age, someone may be recommended the services of an intermediary, but it they can’t find them online, or their website gives off a bad image, then that potential client may never make it to the intermediary’s door, despite the recommendation.

 Be talked about

Oscar Wilde said that there was only one thing worse than being talked about and that was not being talked about. If you want WOM to happen, and in a positive way, you need to be doing something worth talking about. The best way of doing this is to over deliver on your promises – to exceed expectations.

The WOM Considerations

1. Know who is or could be talking about you

Some of your clients will have more influence and their message will be more widely trusted than others.

You could have many clients talking about you, which will have little influence if their message does not have reach or is mistrusted. Or you can have just a handful of clients who are well connected and whose voices are heard above others.

Understanding who the most influential promoters are within your client bank and then encouraging them to make WOM recommendations is key.

2. Where are message being delivered?

When it comes to “where” messages are being delivered it is widely recognised that tighter circles have stronger influence but less reach than those distributed in dispersed communities. Are clients talking about you in their workplace, at certain social clubs, at the school gate, or via social media, for example.

3. Understand what is being said and why

It is not only important to understand what is being said about your organisation, including the good, bad and the ugly, it is also imperative to understand what triggered a client to deliver the message in the first place.

When you receive a new client referral don’t just find out who made the recommendation go one step further and find out why the client made the recommendation. This will help you identify the key drivers of referrals that you can use to your advantage in future.

In today’s market, WOM is more important than ever and intermediaries should be maximising WOM. Knowing what proportion of your client bank are loyal and would recommend you only provides part of the picture. To harness WOM there needs to be greater understanding of how influential promoters are and what it is about your firm/service that triggers clients to make them recommend you and where they will/are delivering positive messages to understand the reach.

Julie Irwin is from Charterhouse Research

Related Posts

There are 0 Comment(s)

You may also be interested in