Sky-Rocket Your Inventory with a Homeowner Referral Plan
Word-of-mouth referrals make up 20-50% of most purchasing decisions. Do you have a plan in place to create advocates for your brand?
On a scale from 1-10 how likely are you to recommend us to a friend?
That question is the meat and bones of one of the most important benchmarks of most companies – how customers feel about the overall sentiment of your brand. You’re likely familiar with the Net Promoter Score (NPS) and how companies use it to measure and improve customer loyalty. If you aren’t familiar with NPS, Hubspot does a great job explaining it.
So what does NPS have to do with building out a referral program? Well first of all, it measures how many people who interact with your business, including your own employees, would tell their friends about your company and bring in new customers. And this matters because 83% of people who responded to Nielsen’s Global Trust in Advertising Report stated that they trust recommendations from family and friends more than any other kind of advertising. So this begs the question – how much are you investing in generating referrals?
Don’t just expect Referrals to Happen
Too many businesses expect that if they offer great service, the referrals will come. If this were true, growing any business would be easy! Unfortunately, that’s not the case, and as with any business goal or strategy, a plan is absolutely necessary to reaching your revenue goals.
In this blog I break down what referral marketing is and the three steps to getting the most out of your referral plan.
What is Referral Marketing?
Referral marketing is a form of marketing that uses your network to spread the word about your business. Rather than relying on traditional forms of advertising, your customers generate leads for you.
In the property management business, it goes without saying that cultivating leads is essential to growing and thriving. Building a solid referral program will help you bring on new owners and make up for those you may lose – client turnover happens, even to the best of us. What’s more is the value of a homeowner referral is substantial. Curious to know how valuable? Check out Vintory’s handy online calculator and blog on the true value of new inventory.
Step1: Keep a Referral Mindset – Always!
You never know where your next lead might come from. It’s important to look at every interaction as an opportunity for a potential referral or new lead. Companies that have referral programs report that up to 40% of their income comes from this one source. Build your network with everyone you encounter. Whether its owners, guests or people you meet in your everyday life.
While it’s important to target the right leads, it’s equally as important to check any preconceived notions about who will be able to make referrals. Keep this referral mindset at all times and instill this mindset in your own team. I recently chatted with one company who built out an incredible referral program through their housekeeping team. Don’t miss an opportunity to help anyone who is part of or interacts with your company make a referral.
Step 2: Building a Referral Process
A referral process is not only necessary to incent and reward those who bring in a referral, but also to track and nurture these leads.
When you create your referral process, think about:
- A guide for your internal team
Create a guide that explains the referral process for employees, and how they can direct their referrals. This should include information such as: possible referral sources, tips for speaking about your services and brand, what incentives to offer and how to capture the referral.
- Capturing the referral
Keeping referrals organized is key to converting them into leads. Referrals come from many different places but you will need to log them all in one system. One of the best ways to do this is to automate your referral process digitally by setting up a form on your website for your referral program and linking this form directly to your CRM.
- Nurturing these leads
Getting a referral in the door is only half of the work. You need to put a process in place for nurturing them. How will your team reach out? How often will they try to contact the lead? And how long will you keep them on your system? Automated touchpoints through a CRM are one of the best ways to ensure that no lead falls through the cracks.
- Offering referral rewards
It’s important to determine what incentive program you will have in place for your team and your customers to make referrals. For example, when a customer refers a friend to Airbnb they get a $20.00 credit. Not all referrals are equal and not all referrals will become customers, so it’s important to determine what benchmarks you have for offering a reward. (Please review any local / state laws before offering rewards).
Step 3: Use Analytics to Refine Your Strategy
Your referral process shouldn’t end once you close your lead. Over time you should pay close attention to what referral sources are bringing in the greatest revenue and what relationships are proving to be the most valuable.
Once you identify the sources that bring in the most amount of referrals, you can invest more time and money into nurturing these relationships.
A Great Referral Program Example
One of the best examples of a referral program I’ve seen is from Dropbox. When I first started using their service they would offer 1 GB of free space whenever you invited one of your friends to Dropbox. They made it easy to invite your contacts, immediately rewarded you and even let you see the status of your referrals
Can you think of a company that you think has an awesome referral program? Let me know in the comments below!
Author: Brooke Pfautz
Brooke is the CEO and Founder of Vintory and is well known in the Vacation Rental industry as the authority when it comes to growing Vacation Rental inventory. You'll find Brooke at his home office, on the latest Vacation Rental webinar or podcast, or at industry events across the States.