Turn Customer Recommendations into an Acquisition Strategy

Turn Customer Recommendations into an Acquisition Strategy
Our recent survey found that friend and family recommendations are the go-to source for consumers looking for new retailers, restaurants, and salons. But they don't make recommendations often.
by Square Mar 13, 2018 — 3 min read
Turn Customer Recommendations into an Acquisition Strategy

Generating new business and finding new customers is no easy feat, but friend and family recommendations can be a powerful way to build a steady stream of newcomers.

Our recent survey found that friend and family recommendations are the go-to source for consumers looking for new retailers, restaurants, and salons. And only 14 percent of people said they don’t place any importance on recommendations from friends and family when looking for a new business (regardless of what type of business that is).

The survey — which asked 1,800 U.S. consumers how they discover, choose, and recommend businesses — also found that when looking for a new business to patronize, 46 percent of people trust the reviews of other customers more than reviews by professionals.

That means your most current customers could be one of your most effective tools for driving new customer acquisition. But here’s the thing: People don’t recommend businesses very often.

Our research shows that the largest groups of retail customers (27 percent) and salon clients (22 percent) only recommend those types of businesses a few times per year. That’s not totally surprising — think about how often you’re actually looking for new retailers or salons to visit.

People do recommend restaurants a bit more often. Twenty-three percent of diners recommend restaurants more than a few times a month.

Knowing that prospective customers seek out personal recommendations and current customers don’t make recommendations that often, how do you change it? How do you leverage your current customers to drive customer acquisition, and how do you do so at scale?

You need to create programs that encourage recommendations from customers — whether they’re recently acquired or your most loyal regulars.

Here are a few ideas for tactics that help to make customer recommendations a scalable acquisition channel:

Offer a referral program.

Referral programs are a great way to encourage recommendations. As a business owner, you can offer a reward to current customers who share your business and bring in new customers. You might also reward the referred customer for coming in.

For example, a current customer at your salon shares your name with their friends and family. When one (or more!) of those people come into your salon for a cut, you reward the customer who told them about you with a gift card, and maybe a discount for the new customer — a win-win for everyone.

Once you’ve implemented a referral program, don’t forget to publicize it on your social media channels, websites, inside your store, via email, texts, and any other way you communicate with your clients.

Create a social campaign for endorsements.

A user-generated content (UGC) campaign leverages content created by users, whether that’s an image or video or tweet or article. By asking customers to generate content that relates to your business, you get them to tacitly endorse your brand and help you reach new groups of prospective customers.

And UGC works. Eighty-five percent of users think visual UGC is more convincing than brand imaging or video, according to Adweek.

You’ve probably seen UGC campaigns all over social media. You may have even participated in one. For example, GoPro reposts one photo per day taken on a GoPro camera with the hashtag #gopro to showcase how its products are used by explorers every day. The hashtag has 34 million images on Instagram.

When you create a UGC campaign, make sure you are clear about what you’re asking for and promote it across all your channels. Reward your creators with a repost, a free sample, or even a grand prize of a free product or service for the best entry.

Encourage organic sharing.

Of course, there are other ways to encourage people to share your brand over social media. You can create experiences that inspire them to do so on their own.

Great service is the best way to do this, whether it’s a really creative nail design or an innovative hair technique. But special events and stellar customer service are also ways to inspire sharing.

Offer your regular customers a chance to join you for an exclusive event, and invite them to bring a plus one (or five). This event could be a behind-the-scenes look at how your restaurant works, an after-hours shopping event (with a friends-and-family discount for shoppers), or an invite to a launch party for a new product or line. A fun event gives your loyal customers the chance to share their enthusiasm for your business with loved ones and you a chance to thank them for their patronage.

Day to day, you should pay attention to your store itself. Interesting art, decor, and head-turning displays and features that easily identify your business are all things that can be photographed and posted to social platforms to let people know where they are. This is an important thing to think about if you cater to a younger demographic that tends to spend time on platforms like Instagram and Snapchat.

Don’t forget to run a tight ship. While this may seem obvious, don’t give customers any reason to be upset. Avoid negative reviews by investing in the basics: a clean and orderly store with helpful, friendly, and happy staff.

Read more about how to develop a proactive strategy that helps you react to reviews.

The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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