It’s far easier to attract fresh business from existing customers – or to encourage those customers to bring their friends and family on board – than it is to attract brand new leads. Yet most businesses forget their customers as soon as the initial sale finishes.

Growth marketers and growth hackers know that referrals and customer retention offer tremendous opportunities, and they capitalize on them as much as possible. You should do the same.

Learn From the Giants – Why Referrals and Retention Matter

When we say that referrals and retention are huge drivers of growth, we’re not just hazarding a guess. We’ve studied numerous companies that have “hacked” their way to rapid success and broken down their methods into our Automated Sales Process (ASP)™.

One of our major findings was that most successful case studies used referrals and customer retention as part of their strategies. And we’re not referring to random mom and pop shops that achieved moderate success – we’re talking about giants like PayPal and Dropbox.

This doesn’t mean you can just forget about other aspects of the sales funnel. They’re also crucial, and we’ve examined them through stages 1-5 of the ASP™ framework (Attraction, First Impression, Engage & Educate, Follow-Up, and Sales Technology). And once you’ve built your foundation, you can’t afford to ignore Referrals & Retention, or you’ll be spending endless time and effort on generating and converting leads while still achieving limited growth.

We call this letting your customers market for you. It’s a process that involves three stages: testimonials, retention, and referral requests.

Step 1: Testimonials

Trying to sell a product or service with no reviews or track record is just as hard as convincing someone to hire you when you have no work experience or references.

Humans require social proof.

Instead of letting your first customers slip through the net after trying so hard to acquire them in the first place, ask for a testimonial. Ideally, this should be done at the point when they’re experiencing peak happiness (e.g., when they use the product for the first time and get the results they desired).

If your clients ignore or refuse your requests, you could offer a discount in return for the testimonial as an extra incentive.

We recommend using the following formula when requesting a testimonial from a customer (this lays out the structure for the testimonial):

[Specific End Result or Benefit the Customer Received] + [Specific Period of Time] + [Accompanied Customer Emotion] + [Customer Name with Relevant Stats]

Obviously, you can’t force anyone to follow this structure, but you can try to prompt it through the right questions. Ask your customers to consider what made them choose you and what their positive results were.

What about negative reviews?

The only thing more dispiriting than having no testimonials is receiving negative testimonials. But don’t fall into the trap of thinking you can “rise above” all that by ignoring them. Yes, even if the review has no factual basis.

Customers won’t assume you’re noble and that the reviewer is an idiot/liar – they’ll think that you simply don’t care about customer experience.

There are two approaches you can take, depending on whether the complaint is based around truth or a lie:

• For a negative truth – apologize, take ownership of the misstep, and explain how you’ll solve the problem
• For a negative lie – state the comment is inaccurate and provide evidence

Often, if you handle a negative truth in the right way by offering a refund or solution, the customer will remove their review on request.

Step 2: Retention

Getting a testimonial from an existing customer is great. But do you know what’s better? Convincing them to stick around and buy from you again.

One way to achieve retention is through upselling/cross-selling (as discussed previously), and another is through repeat purchases. For the latter, you’ll need to extend the duration of the customer relationship.

How? We propose three main strategies.

The first involves creating a community. This is usually done online through social media platforms and forums (choose one place to start before branching out). Popular online platform include Facebook groups and Discord channels. And it doesn’t have to be limited to only online. Some businesses start in-person communities, especially luxury or leisure companies that host special events or clubs.

You could also request customer satisfaction surveys – they offer not only an opportunity to receive actionable feedback but also to make your customers aware of other products and services. By subtly asking your customers if they’re aware of a product/service, you could end up facilitating more sales.

Finally, don’t forget post-sales education. Check in with your customer after their purchase to make sure they know how your product works. Even if you think your product is so simple that sending a tutorial would be patronizing, you might be surprised at the reality.

Step 3: Referral Request

Now you’ve done your best to get a testimonial and retain your customers, there’s just one thing left – and it’s arguably the most important of all. Get your customers to refer more people to your business!

Whether they’ve put the thought into developing a coherent strategy or not, most (good) businesses generate a certain number of passive referrals through word of mouth. But we want you to be proactive – ask your customers to help you.

The best way to do this is by making it seem like, by referring you, they’ll be helping themselves. Offer an incentive. This could be financial (money) or in-kind (access to your service or product for free).

As inspiration and examples, you may have already seen apps that have offered you a free month’s subscription in exchange for referring a friend, or perhaps even a free $10.

An in-kind system is preferable since it costs less money, but it’s not always feasible. The model mostly works for SAAS companies and wouldn’t work as well with physical product businesses such as a T-shirt manufacturer.

A final growth hack is to ask for referrals as a condition of doing business, but this is an extreme and relatively rare approach.

Time to Put It All Together

Now you know all the theory behind growth hacking, there’s only one thing left – to take action.

We’ve let you into an Aladdin’s cave of tricks and hacks to help you emanate successful companies, practically guaranteed to bring good results. All you need is to follow through. Diligently implementing each step from the six-stage framework might sound tough, but we’d strongly urge you not to miss anything out.

Fortunately, you don’t have to do it all alone – we as an innovative growth marketing agency, have been there many times before and can offer tailored advice to help you do the same. Get it touch with us at Deviate Labs.