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Sarah Haston: A closer dive into referral marketing

Sarah Haston • Updated Aug 8, 2017 at 1:00 PM

Every business owner and sales professional I know wants more referrals. That’s why we need a referral marketing strategy. But what are the objectives of a referral marketing strategy?

We all know that the result is to receive more referrals but there are several strategic objectives in a referral marketing strategy. 

An illustration that helps me visualize this is the loyalty ladder. Here’s what it looks like:

• Advocate.

• Member.

• Repeat buyer.

• First-time buyer.

• Prospect.

There are five objectives that we are working on in a referral marketing strategy.

• Turn prospects into first-time buyers or customers.

• Turn first-time buyers into repeat buyers or loyal customers.

• Turn repeat buyers or loyal customers into family or community.

• Turn our community into advocates for our business, goods and services.

• Ultimately, turn advocates into raving fans who can’t stop talking about our quality products and our quality service.

Raving fans are the ones who generate the referrals for our business. These are the ones we want to be touching on a regular basis – once every four to six weeks – to add value, affirm and educate on how to spot a good referral for us. And then when the referral arrives we should take the utmost care with that referral and treat them as well, if not better, than we treated our raving fan or referral source. We should also express our appreciation to our raving fan for the incredible compliment they have given to us by referring someone they know.

Advocates are the ones who are likely to become raving fans and excellent referral sources for us. The key with them is to continue exceeding expectations and to make them conscious of how they can help you such as a testimonial, a review and a referral.

Members are the ones who are likely to remain loyal but who are not at a motivation level yet to advocate for you. The key with them is to listen to their feedback, to meet their expectations, and then to go one step beyond and exceed their expectations. As you do this you express how much you value them as your customer and you start looking for the signals that they might be ready to advocate for you.

Of course, you want to continue turning prospects into customers and customers into members, but the three most important groups to a powerful referral system are your members, advocates and raving fans.

• Action – Make a list of each of the three groups right now, organize your customer database and set some action steps you will take to start moving them up the loyalty ladder.


• Reward or loyalty program – Create and distribute a “referral card message” to your accounts via email marketing, social media, word of mouth and printed material you can deliver with goods and services. This message should explain the appreciation you will provide your customers who give you referrals. Also encourage your employees to ask for referrals.  It is even smart to create an incentive for your employees who gain referrals.  

• Tracking – To properly incentivize and reward our raving fans, we need to track their referrals. To do this, you must create a tracking system and systemize your plan. It is always important to track marketing strategies so that you know what is working and what is not. This important step is often missed even though it is just as crucial as the basic first impression. 

Sarah Haston is economic development director in Lebanon.

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