A newly published survey of small business owners conducted by Marketing Best Practices.com shows that referral marketing provides the highest return on investment (ROI) for their marketing dollars of any marketing method.
Thirty-six (36) percent of respondents of the poll said referral marketing gave them the biggest return for their marketing dollar. The internet came in a very low second at 14%, while networking followed closely with 13% and direct mail was fourth with 12%.
The press release announcing results of the survey quotes small business marketing expert David Frey as saying "This poll demonstrates the importance of implementing referral systems. Most business comes from referrals, but only a few small businesses actually have referral programs in place."
At DK Strategic Consulting, we find that referral marketing is even more important for professionals, such as lawyers, consultants, realtors, mortgage brokers, and people in the financial services industries.
A referral marketing program can cost four to eight times less than other popular marketing methods, such as direct mail or advertising," and yet produce far greater results. This is largely do to the type of business leads each method attracts. With direct mail or advertising, you attract cold, or "unqualified" leads. With referral marketing, you attract high-quality warm or hot leads.
With referral marketing, clients represent "relationships," not transactions. The transactional approach to business wastes time and money. Why cast a wide net to snare a few "cold" prospects, only to have to cast the net again and again? Building a system to create relationships and great word-of-mouth endorsements are the real keys to successfully building your business.
This poll is proof of that.
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