Do Your Customers Refer You to Family and Friends?

In these days of online reviews, customer purchase decisions are increasingly influenced by referrals.  Word of mouth counts for a lot, even if it comes from total strangers.

However, when referrals come from family members and friends where there is a high level of trust, they are that much more powerful in influencing a customer’s purchase decision.  According to App Data Room, 84% of customers will take action based on recommendations from people they know and 68% of customers trust consumer opinions posted online. Customers who come from a referral by a trusted source also have a 37% higher retention rate.  This means that when customers refer their friends and family to you, they are improving your bottom line.

Do you know if your customers refer you to their family and friends?

How do you know if these important referrals are happening?  One way to find out is to collect information from each customer to determine what caused them to pick up the phone, email your company or walk through your door.  Most companies have some mechanism for intake tracking to measure their ROI on advertising. For example, “How did you hear about us?” is a common question for new customers.

At Client Insight Inc., we call our clients’ customers and have conversations to obtain valuable feedback.  One of the questions we ask is if the customer refers our client to their family members and friends. Not only does this enable us to determine the Net Promoter Score (NPS), it also provides an opening for us to ask the respondent why they would refer our client, or why they would not.  The answers to these questions are extremely valuable to our clients.  They will gain insights into the customers’ willingness to refer based on their positive customer experiences. Or we find out why customers will not refer.  Often the reasons customers would not refer come as a surprise to our clients. As a third party, we identify information through telephone interviews which our clients would not be able to gather in any other way.

So the true measure of your company’s success at creating a positive and effective “Customer Experience” is if your customers will refer your company to their friends and family.  This is the gold standard, the highest achievement, the prize at the end of the customer journey. You don’t just want to make a sale. You want your customer to help you cast a net over their friends and family.

At Client Insight Inc., we are in the business of helping our clients understand their customer’s experience and increase referrals to friends and family. If you would like to learn more about how we can help your business grow through referrals, give us a call.

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Listen – Measure – Improve, it’s a profitability strategy for your company.


Photo source: LA Marketing

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