Marketing Key #6 of 13

Marketing Key #6 – Customer referrals are key to growth

Referrals and endorsements are an important part of any business. There is nothing more powerful than a friend or trusted colleague recommending a product or service. But there is an important difference between product or service referrals. Let’s examine.

Product: Let’s say your neighbor knows you need a new lawn mower. He loves his and recommends that you buy the same model. At this point there are a number of things you might do. Maybe ask your neighbor if you can try his lawn mower out. Maybe head to the local Home Depot to speak with someone and see how much it costs. Maybe even check out Consumer Reports to see how they rate the model. Lot’s of solid options to take advantage of before making your decision. And let’s say you do buy the lawn mower and it does not work out, you always have the option of returning it.

Service: Let’s say the same neighbor knows you are looking for someone to mount a flat screen TV on your wall. He had someone do the same thing about 6 months ago and has all sorts of good things to say about the guy. So now what are your options? You can have the guy come out and give you a estimate, but that’s about it. There’s no testing. No expert at your local store. And certainly no returning it if you are not happy.

This is the main difference. I have said this many times, its all about trust when it comes to purchasing a service. And for the most part, people trust referrals from people they know. Referrals are a key component to growing a service business.

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2 Responses

  1. Hi Jeff Monaghan, I just found your blog and I think it’s interesting. Haven’t read much yet but I think I will. Actually I’m looking for material to use for a short essay I will write at the university. I’m interested in studies of “marketing of web-based services, which methods has been successfully?”. I would like to collect search results from different studies and compare them. Do you have any suggestion about where I can start looking for this kind of information?

    Best Regards

    Olof

    • Olof,
      That’s a tough one. I am not aware of any official studies regarding this but there are plenty of articles that have been written. Here is an example. Sorry I couldn’t be more help.

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