“We don’t need marketing. We only get new customers through customer recommendations.”

Igor PauletičSales

Customer recommendations are the only marketing tool that definitely works. Always! All other methods that companies use are definitely less effective in terms of input and yield. Unfortunately, the range of recommendations is limited to the number of (satisfied) customers. When this range is reached, we have to start using other, less effective marketing approaches—whether we like it or not—to increase growth (if our ambitions for growth are substantial). Sadly I see that in most cases customer recommendations are completely left to chance and therefore represent potential that is still largely underused.

Customer recommendations are the only marketing tool that definitely works. Always. Click To Tweet

Do you know which customer recommended you?

When someone I talk to tells me the exact same thing I wrote in the title I don’t even bother explaining the difference between marketing and advertising. I came to realize that it’s significantly more effective to continue the conversation by discussing the use of potential provided by customer recommendations and satisfied customers. I ask people several key questions:

  1. Do you know for sure which customer recommended you and to whom? Do you also know this if the recommendation that was given did not lead to closing a new business deal?
  2. Do you know how you could systemically encourage satisfied customers to make recommendations? Can you make them think of you and motivate them to recommend you in their social circle?
  3. Can you assess the unused potential of satisfied customers that, even though they were satisfied with you, don’t actively promote you?
Can you make customers think of you and motivate them to recommend you in their social circle? Click To Tweet

If the conversation then develops into a debate on the suitability of certain concrete examples that we have already introduced with some of our clients, the people I’m discussing this with usually realize that they could still do a great deal to encourage their customers to recommend them or set up a special system for this.

This leads to discussing whether they have the capacity to systemically measure their customers’ satisfaction after every service they provide and accordingly measure the potential of promoters among all of their customers.

Be proactive and encourage satisfied customers to recommend you

The list of potential promoters (according to the Net Promoter Score methodology) forms the basis for being proactive and encouraging customers that have expressed satisfaction to recommend you. Another element guaranteeing success in encouraging your customers to do this is the “reward” they receive for making a recommendation, which you as a provider can use to start the conversation on recommendations or your wish to be promoted by satisfied customers in the first place. Here it’s of course wise to follow the golden rule of customer recommendation systems and reward both the person making the recommendation and the person receiving it when the recommendation has taken place. In any case, this sooner or later requires setting up a special system covering the entire process and providing suitable IT support for it.

Think outside the box

In some cases, especially when taking into account the provider’s activity, the simplest way to set up a customer recommendation system is to create special products that offer recommendation-related offers. I sometimes feel that companies don’t see this at all, even though it’s constantly there in front of their eyes or they are actually already doing something similar.

Why wouldn’t friends also take advantage of the concept of a family car insurance bonus? Click To Tweet

Why wouldn’t the concept of a family insurance bonus be used by friends that would add a new policyholder for the insurance company to their “family” circle each year? Why wouldn’t friends that decide to take out a consumer loan together with the same bank be offered better loan deals? Why wouldn’t we collect loyalty points with a retailer or tourism provider collectively with our friends, and then all receive discounts for making group purchases? I’ve already written about some concrete examples in the past. Maybe they’re worth reading again.

Show gratitude even for recommendations of little things

The “soft” recommendations are a separate chapter altogether. I (FrodX) would be happy to reward anyone that only brought me a lead or invited new readers to sign up for our newsletter and start reading our blog. Even though they didn’t buy anything. Or at least not any time soon. In the B2B segment, recommendations probably count significantly more than in the B2C segment, but it’s significantly more difficult to link them directly to closing a specific deal and they are always more of a matter of handling a person on-on-one than through an automated process.

Consultancy companies and business solution providers, such as FrodX, can use case studies that their customers proudly share and active participation of satisfied customers at their events as a tool. Visits by our reference customers have an even greater impact and we also bet a lot on the personal promotion of our clients’ employees that got promoted by their companies thanks to taking part in our projects.

The most sensible step you can make when you’re no longer satisfied with your business growth

Your business may truly not need to be advertised. But I truly doubt that you don’t need to manage your customer recommendations actively—that is, systemically measure your customers’ satisfaction and encourage the most satisfied ones to recommend you. In any case you practically can’t set up a more measurable marketing process than customer recommendation management. Setting up a customer recommendation system is the most sensible first step in enhancing your marketing activities, when you’re no longer satisfied with your natural business growth. We’d be happy to give you a hand.

You practically can’t set up a more measurable marketing process than customer recommendation management. Click To Tweet

 

igor.pauletic@frodx.com

 

About the Author

Igor Pauletič

Founder and CEO of FrodX, who uses his rich experience to assist customers to transfer the latest technological, operational, and social trends into their business operations. He mostly focuses on new product development, omnichannel sales architectures, and go-to-market strategies. As a team member, he fills the role of the idea generator and constantly challenges the status quo and established decision making patterns.