How to get more word-of-mouth referrals & boost customer retention

If you’ve ever wanted to know how to get more referrals, this article is for you. Discover how repeat business and word-of-mouth referrals can become the cornerstone of your business growth. Discover ways to turn new customers into loyal supporters, saving money on marketing and improving your business's reputation.

Welcome to the essential guide for any service-based business aiming to survive and thrive. Think of repeat business and word-of-mouth referrals as the dynamic duo, the Batman and Robin of tools for business growth. They’re more than just industry jargon; they are the bedrock of a flourishing business.

The bond between repeat business and referrals is naturally symbiotic. Happy customers don’t just return; they become your unpaid marketing squad, raving about their experiences. And let’s be honest, who doesn’t want a team of cheerleaders promoting their business for free?

But let’s not kid ourselves—this kind of loyalty and advocacy doesn’t just magically appear. It requires a cocktail of deliberate actions and strategic thinking to ensure customers are satisfied and passionate evangelists for your services.

In this article, you’ll learn:

It’s about crafting those “wow” moments customers can’t wait to discuss at their next dinner party. Then, businesses should implement strategies to encourage that process.
a car mechanic showing a client how to change a tyre

The importance of repeat customers and word-of-mouth referrals

Customer loyalty and word-of-mouth referrals are essential for ongoing success in service-based businesses. They are fundamental pillars that contribute to long-term success and financial stability.

It helps with financial stability and sales consistency

Repeat customers serve as a financial bedrock for any business. Repeat customers trust your service and are likelier to continue working with you. On the other hand, new clients require marketing and sales efforts to attract them. They need more investment to familiarise themselves with your service or brand. Building trust with new clients takes time and effort. Returning clients make it easier to forecast revenue and plan business growth more confidently.

It helps save your business money.

Acquiring a new customer can cost five times more than retaining an existing one. Existing customers are also likely to spend more over time, increasing their lifetime value. This approach has a noticeable impact on your bottom line. By focusing on customer retention, businesses can allocate their budgets more efficiently. This results in less being spent on customer acquisition and more on enhancing the quality of their service.

It helps to boost brand loyalty and the business reputation.

Customer retention directly impacts brand loyalty and reputation (and return customers also make excellent case studies!) Satisfied repeat customers are more likely to advocate for your brand, sharing their positive experiences with friends and family. This organic spread of information boosts your business’s reputation without the direct costs associated with traditional marketing. The positive effects of a good reputation are what makes customer retention important!

The sales process is much easier when your customers trust you

Referrals from satisfied customers come with an inherent level of trust that is hard to achieve through any other marketing strategy. When someone recommends a new customer to you, that customer already trusts you. They have this trust because of the positive experiences they have heard about from the person who referred them.

When your business builds trust like this, it reduces the barriers to sale, as less time and effort is needed to convince them of your credibility. When a loyal customer recommends a landscaping company to their neighbour, the neighbour is more likely to hire them. The neighbour may not even consider other options or try to negotiate prices.

In the following sections, we will explore actionable strategies that service-based businesses can implement to harness the full potential of these advantages.

group of people having a team meeting

The two essential pillars to increase client retention and word-of-mouth sales

For any service-based business looking to boost client retention and amp up those word-of-mouth referrals, success rests on two main pillars: business operations and focused marketing. Both are essential and need to work in tandem like a well-oiled machine to spin the wheel of repeat business and glowing referrals.

Pillar 1: Ensuring operations focus on customer satisfaction

This pillar encompasses all the internal processes that impact the customer experience directly, from the initial service delivery to post-service follow-up. How a business manages its operations affects every customer interaction, particularly the customer churn rate. For instance, consider an electrical contracting company: the professionalism of its electricians, the timeliness of service completion, and the clarity of communication with customers determine whether a single home repair job leads to ongoing maintenance contracts and referrals from happy homeowners.

Pillar 2: Leveraging specific marketing strategies

This pillar emphasises the importance of businesses implementing marketing strategies to encourage repeat business and stimulate word-of-mouth sales. It’s about how effectively a company can communicate its value to re-engage existing customers. Including activities specifically focused on retention and encouraging word of mouth boosts the likelihood of those things happening.

Continue reading to discover more about each pillar. Also, find practical tips for retaining current customers and attracting new ones to your business.

Pillar 1: Ensuring operations focus on customer satisfaction

The foundation must begin with customer satisfaction to secure referrals and repeat business. Companies must consistently deliver high-quality service—after all, happy customers are the bedrock of any successful service-based business.

Every business owner aspires to please their customers; nobody sets out with the intention of disappointing them. However, even with the best intentions, slip-ups may lead to negative experiences.

For instance, during periods of high demand, clients might experience longer waiting times than usual, which can lead to frustration and negative feedback. Similarly, as a business expands and new team members join, there might be discrepancies in service quality if these new employees still need to be up to the standard of the established team members.

As businesses grow and owners become less involved in day-to-day customer interactions, implementing additional measures to maintain service quality becomes crucial.

Tips for maintaining high customer satisfaction

It’s important to recognise past problems, but it’s better to have plans to prevent them from happening. Here are some strategies you can use to make sure customers are satisfied.

Responsive customer service: Ensure you handle customer queries and complaints promptly and effectively. A quick and caring response can often turn a potentially harmful experience into a positive one.
Tailor customer interactions: Tailor services to meet individual needs where possible. Personal attention can significantly boost customer satisfaction and lead to word-of-mouth referrals.
Quality control processes: It’s a blunt truth, but it has to be said – your staff won’t always have the same quantity standards you will. You must implement quality control processes to ensure consistency for your clients.
Encourage feedback from your team: In contrast to the above point, while some staff may be low performers, many will often be high performers. Encourage (and listen) to their feedback on how your business can identify issues and improve service.
Ongoing staff training and development: Regular training sessions ensure that all employees, regardless of how new they are, understand the company’s service standards and how to meet them.
Reward loyalty: Implementing a customer loyalty program that rewards repeat customers can enhance their overall experience and leave a positive impression.

Pillar 2: Using marketing strategies that specifically encourage word-of-mouth sales

You must deploy targeted strategies to increase customer retention and stimulate word-of-mouth sales. Essential marketing can grab attention. However, you need a more focused approach to build lasting customer relationships and have clients promote your business.

By tailoring your strategies to focus on increasing customer retention and referral rates specifically, you can significantly increase the effectiveness of your marketing efforts, ensuring that customers not only return but also become vocal advocates for your brand. This approach establishes a strong foundation for long-term growth.

Step 1: Sounds simple, but make sure customers remember your business

Customers may not have the sharp memory you assume they do. Do you recall the name of every business you’ve interacted with, especially as weeks or months pass? Your customers need to remember you clearly when returning or referring others.

You achieve this by leaving something behind with your clients that helps to keep your business top-of-mind.

Here are some of the most effective items, ranked from least to most expensive:

Business cards: It sounds simple, but always leave a business card with your customers. Many people will stash them into a drawer “just in case”. Pairing your card with a kind gesture can significantly improve customer interaction, leaving them with a positive impression.

For example, when you hand your card over, say, “Here’s my card; give me a call or shoot me an email if you have any issues.” this shows your customers that you care about them and gives them a reason to keep the card! When they talk about your great job, they’ll remember, “Oh, I kept their card; let me grab their details for you.”
Provide coupons for their next service: Get customers to return by giving them a discount on their next purchase through a voucher. This voucher will make them more likely to keep your marketing materials. This tactic is an excellent way to encourage repeat business.
Stickers: These can be surprisingly effective, especially if placed strategically. For example, leave a sticker on the control box if you repair garage doors. For electricians, a sticker on the switchboard works well. Consider making these stickers useful by including a section suggesting the next service and a spot to write the date.
Magnets: Similar to stickers, magnets keep your contact details easily accessible when needed.
Branded tote bags: With the shift away from plastic bags, a high-quality tote bag serves a practical purpose and turns your customers into walking advertisements for your business.
Branded promotional Items: The key to promotional items is choosing things people will use, like pens, notepads, keychains, bottle openers, stubby holders, or drink bottles. The more often a customer sees your business name, the more likely they will remember it. By strategically choosing what you leave behind, you ensure your business remains in your customers’ minds, increasing the likelihood of repeat visits and referrals.

Step 2: Build goodwill, strengthen relationships and stay top of mind

This next step focuses on building goodwill and enhancing those relationships, ensuring your business stays in mind long after their first job with you. By prioritising this, you strengthen customer loyalty and set the stage for continuous engagement and referrals.

Let’s delve into practical strategies to help keep your business at the forefront of your customer’s minds, fostering an environment where repeat business is encouraged.

Tailored follow-ups: Tailoring your follow-up communication is vital to making each customer feel valued. When you contact customers after their service, mention specific details about the service they received. This detail will show that you are attentive and care about their experience. It also helps to personalise the follow-up communication. This strategy enhances the customer’s experience and reinforces their decision to choose your business, encouraging repeat patronage.
Regular newsletters: Keep your customers engaged and informed with regular newsletters. These can include updates about your business, relevant industry news, tips on maintenance, or even unique content that adds value to their everyday lives. Newsletters are an excellent way to remind customers of your presence and expertise without being overly promotional.
Exclusive offers: Reward your loyal customers with exclusive offers just for them. These offers may include a discount on their next service. They may also include early access to new products. Additionally, they may offer special pricing on a bundle of services. Exclusive offers promote repeat business and make customers feel special.
Staying active on social media: Maintain a presence on social media platforms where your customers spend their time. Regular posts, interactive polls, and engaging content keep your business at the top of your mind. Use social media not just to broadcast but to communicate and respond to comments, share stories, and create a community around your business.
Seasonal greeting cards: Send out greeting cards during major holidays. This gesture shows you remember your customers and value the relationship beyond business transactions. It’s a warm, personal touch that can set your service apart from others.
Referral gifts: Encourage word-of-mouth marketing by offering gifts for referrals. These gifts could be a discount, a service upgrade, or a physical gift. Ensure your customers know that when they refer someone, they aren’t just helping you grow and unlocking a reward for themselves. These gifts motivate customers to spread the word more actively and frequently.

Step 3: Be proactive, and don’t wait for the customer to contact you

Being proactive in customer relationships means thinking ahead, identifying a need and reaching out accordingly. This approach demonstrates your commitment to customer care and positions your business as thoughtful and attentive, qualities that build loyalty and encourage repeat business.

Here are some examples of how being proactive can benefit both your business and your customers:

Air conditioning: Setting a reminder to contact the customer in 12 months to schedule a maintenance check can be invaluable. Many customers may need help remembering recommended service intervals, and by proactively reaching out, you ensure their equipment remains in top condition while securing future work.
Gutter cleaning: After performing initial gutter cleaning, schedule a reminder to reach out before the heavy rain season to offer your services again. This strategy helps maintain the gutters’ condition and prevents potential damage due to blockages.
Landscaping: If you’ve done spring planting for a client, a call in the early summer to discuss maintenance or additional services can be timely. Offer to check on the health of the plants and suggest additional care or additions that could enhance their garden.
Plumbing: After fixing any significant plumbing issue, inform the customer about the potential need for a check-up in a few months, mainly if it might prevent future problems. For example, if roots were causing blockages, suggest a follow-up to inspect pipes to prevent further damage.
Pest control: After an initial visit to treat a home, setting a reminder to contact the homeowner for a follow-up before the typical resurgence period of pests can ensure continuous protection and regular business.

By implementing a system to remind you to contact your customers proactively, you ensure that your business remains their go-to choice while also providing a level of service that can significantly enhance customer satisfaction and retention.

Bonus tip: How do you keep track of all this?

We’ve shared many tips and ideas in this article, and you might wonder how you keep track of everything you should be doing. That’s where a Customer Relationship Manager (CRM) comes in!

A CRM is a system that helps businesses track all customer interactions and data; it ensures everything gets noticed by streamlining processes. Companies can provide a more tailored and efficient service by having a central place to store all customer-related information.

Here are some essential but crucial pieces of information every service business should record in their CRM:

Customer contact details: Names, phone numbers, addresses, and email addresses.
Previous purchases and services: Detailed records of a customer’s services, including dates and outcomes.
Communication history: It logs all communications, including phone calls, emails, service calls, and face-to-face interactions.
Customer preferences and feedback: Insights into the customer’s preferences, service feedback, and any particular likes or dislikes noted during interactions.