One of the most powerful strategies to get new customers is very rarely used in the taxi business. This strategy is referrals.
A major marketing research indicates that an average person has an immediate circle of influence of fifty-two other people. It means that every customer who uses your service could bring you as many as fifty two other customers. In many cases you don’t give rides to one person, but to families of at least two people, which takes the number of clients they could bring you as high as hundred and four new customers.
There are two types of customers most likely to refer their friends to you. First type is the customers who are always looking for deals. If your offer is attractive enough for them, they’ll do whatever they can to get their reward.
Second type is customers who have been with you for a long time, who use you service on a regular basis and love it. You have developed a special relationship with these customers and they would give you back without demanding to be paid (which doesn’t mean that that’s what you should do). The reason for it is that everybody loves to brag to friends and colleagues about being smart, getting great deals and exceptional service, especially if motivated to do so.
However, a research by the American Management Association shows that the average satisfied customer tells only three other people about the satisfactory experience. If you want that person to move from telling three to telling fifty, you’ll need to take some definite action. That action should be recognition and appreciation.
A client that refers a lot of his friends to your business is worth a great deal of money to you. The person who referred once can and will refer many more people if motivated to do so. That is why it is crucial to give recognition and appreciation immediately after a satisfied customer send a friend of theirs to use your business. It can be a quick thank you note or telephone call that happens right away. Subsequently some kind of thank you reward is appropriate and effective.
We can give away books, clocks, small electronic items. You can make a deal with other businesses in your area and send, for example, a gift cerfiticate from a local restaurant. The possibilities are truly endless and allow you to send a different gift each time the person refers, which is a great idea because it adds intrigue and variety to the offer. Positive results from this kind of action can be truly amazing.
You’d also be astonished with the negative results of not having any referral related offers. The client who refers once and doesn’t get recognition and will probably never say a thing to you, but frequently he’ll think to himself, “I sent that guy a customer and never got even a thank you.” And then he never refers again.
What do you have to do to have it work for you? Usually it’s enough to just ask for a referral!
A great way to directly stimulate referrals from your customers is second party gift certificate method. That’s how it works:
You can say to your regular, satisfied customer: “As you may know, many of our customers come as referrals from other customers. We try to encourage it and also show our customers that we appreciate what they do for us. This week we’re doing something that you might want to do to help us get more business and be able to do a favor for your friends too.” Then you give the customer a gift certificate for a certain amount, negotiable only by a second party that the customer addresses to and signs it over to.
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