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Referrals are a powerful form of marketing for all kinds of businesses. If someone we know and trust recommends a particular brand or product to us, we are likely to listen to what they say and trust their word. Referrals are the most trusted form of promotion, with 83% of people surveyed saying they either completely or somewhat trust recommendations from their friends and family.

Referrals and word-of-mouth are particularly powerful for local businesses. If your satisfied customers tell their friends how amazing you are, word will spread around your local area, earning you a strong positive reputation. A good reputation leads to more customers, more sales, and more profits.

How local businesses win with referral marketing

Referral programs

Don’t just sit around and wait for your customers to refer you – actively encourage them to. Implement a referral scheme that rewards your customers when they successfully refer someone to you. You could offer them a discount off their next purchase, a free gift, or a free month of your service, for example.

The reward will depend on the type of business you are and what you sell. Make sure you advertise your referral program to your customers. If they don’t know about it, they’re much less likely to act on it.

Customer testimonials

Testimonials on your website can also act as a form of referral marketing. If people see testimonials from satisfied customers on your website, this will help them make the decision to buy.

Along with regular written testimonials, you could try video testimonials. People relate to and trust other people’s word. This is even more effective when they can see and hear the customer. It makes it easier to develop trust with that person, even if it is someone they don’t know personally.

Networking with local businesses

Other businesses in your area can also refer you, but you need to build a strong relationship with them first. Be on the lookout for local business networking events. Once other business owners get to know and trust you, they are more likely to refer you to their customers. You should especially build relationships with businesses that have a similar target audience to yours because their customers are more likely to become your customers.

Try out these three ideas to start spreading positive word of mouth in your local area and get more customers for your local business. What technique gets you the most referrals in your business?