A referred customer has a 16% higher life-time value

Know your audience. The adage applies to almost every form of communication. Yet so many choose the wrong medium to deliver that message. And they do it again, again, and again, spending countless dollars and even more time hoping for a different response. The same applies in sales. Whether selling cars, heathier eating, or your credit union, one has to know the audience and communicate in such a way that the message is seen, heard, and felt.

I’ve spent 15 years selling software and professional services to public and private sector organizations on all continents. I’ve been fortunate enough to live and work in some of the most recognizable financial centers in the world. But no matter what the product or service, the first step is always the same: identify the buyer.

Who are you selling to? Where do they live? What do they need? When are they available? Why would they be interested in talking to you? How do you reach them? How do you provide true value to them?

These are all complicated questions that could take weeks and months to answer, and will shift over time. So how can you accelerate this process and reach the new members you seek?

Look no further than your existing members. They are the types of people you want. You know where they are and what they need because they use your services every month. You know they like you because they remain members and are in regular contact with you via phone, mail, email, and/or social media.

Attracting more of the same types of people as your existing members is as simple as looking at their friends and family. These existing members likely have many contacts in the same city. These contacts likely have similar needs, attitudes and interests as their friends. Friends trust each other and each other’s recommendations. And most importantly, friends know the best way to get in touch with one another.

According to a report by Nielsen, 92% of consumers around the world say they trust earned media, such as recommendations from friends and family, above all other forms of advertising, and people are four times more likely to buy when referred by a friend.

So give the power to your existing members to refer their friends. And reward those members for inviting others to join them in using your services. Treat those new members well with specific offers or promotions, and soon they, too, will refer their new set of friends. The cycle continues and your member base grows.

A referred customer has a 16% higher life-time value.

A referred customer is 18% more loyal than a customer acquired through a different method and spends 13.2% more than a non-referred customer.

Let your member decide who, when, and how they communicate to their friends. Allowing your existing member to refer their friends using his or her preferred communication method is the key differentiator among referral software platforms. The tool must allow your members to invite their friends using text, email, and social media tools. If not, the message will not be trusted, understood, or accepted. Know your audience.