Referral Marketing And New Client Acquisition

 

Referral marketing, also known as a word-of-mouth recommendation, is considered one of the most powerful AND cost-effective tools for growing the new client base of a veterinary practice. However, creating a steady stream of referrals is something that does require some elbow grease and thoughtfulness, and the use of evidence-based strategies can boost it. Often, business owners believe that if their product or service is of high enough quality, consumers will naturally spread the word. While there is some truth in that line of thinking, to take full advantage of the goodwill generated from a great customer experience, a business owner should do a little more to ensure great referrals materialize.

 

The Importance and Benefits of Referrals

So why is referral marketing so crucial to a business owner? At the end of the day, the main goal of every business owner is to increase that bottom line. But we all know that new client acquisition is one of the biggest business growth challenges for veterinary practices. 

 

 

It is always easier to get a new client if that person was referred by a friend, family member, or existing client. This is why referral marketing should be an integral part of any business owner’s sales or marketing strategies. Here are some reasons you should consider referral marketing:

 

Low Cost

Most business owners aim to save costs and improve profit margins. They ask themselves, “What can I do to yield the highest ROI?” When you consider how referral marketing fits in, the best-case scenario is that a happy customer will promote or refer your business for absolutely no cost. Worst case scenario, sometimes you need to offer some promotion or incentive to get people to refer your business for little cost.

Increased Conversion

Simply put, "conversion happens when someone completes the action you want them to complete." In terms of new client acquisition, you can think about how referrals turn a local pet owner from someone who has just heard about your practice into someone who is a bonded client -- or how you convert that pet owner into a client. Did you know that you can see up to 80% closing/conversion rates when the new client comes from a strong referral? So, potentially, for every 10 times your practice is recommended, you could gain up to 8 new clients! 

Early Trust can Lead to Quicker Conversions

When a new client is referred to you by someone they trust, you start at a higher point of trust, meaning this prospect is already “warm.” This usually results in you spending less time trying to build their awareness, sell them on your services, and then get them to make an appointment. When you meet someone “cold,” you definitely need to spend some time building awareness about what exactly you offer and putting in some effort to gain their trust. That can sometimes take months. There is no quicker way to gain someone’s trust than an introduction from a quality referral.

 

 

Reaffirm that You and Your Team are Doing Something Right

• A Texas Tech study shows that at least 80% percent of customers that have a great experience are more likely to refer that business to a friend or family member. So if you know that a new client came to you from a recommendation, you certainly impressed that existing client!
• Lastly, and I believe this to be the most important, when people talk about your business positively and start referring your services to their family and friends, it reaffirms that you and your team are doing something great. Not only does it tell you that you are on the right path, but it also builds a positive culture within your team. Everybody starts feeling better about themselves and believing in what they do. As a result, that creates value for everyone involved.

 

The Difference Between Promotions and Discounts

We touched on incentives and promotions earlier, but it is essential to understand the difference between a promotion and a discount before we dive deeper.

A discount is a short-term strategy that reduces the basic price of a product or service in hopes of selling the product or service to increase sales numbers. Although the positive is that you have a higher chance of selling the product or service, the downside is that it can devalue the product or service you are offering. In the medical field, when a consumer or doctor hears “discounted medicine,” it generally has a negative connotation. Devaluing your product or service can sometimes be very difficult to recover from. Local pet owners can get accustomed to that lower price and often wait until the next “sale” to purchase or make an appointment again.

Promotions can also consist of a short-term "push" that delivers long-term positive effects. A promotion helps create awareness and interest around a specific product or service, but it does not necessarily involve any pricing changes. You can promote a new product or service without giving a discount. A promotion can be an educational campaign, a contest, an advertisement, or in this case, a referral program. For example, you can entice a good client to refer your business by offering them a promotion of a gift card or credit for every referral without ever reducing the basic price of vaccinations, grooming, or wellness exams.

However, you MUST understand that providing "incentives" is strictly against the guidelines of review sites like Yelp and Google, and therefore you should not be incentivizing online reviews. Our recommendations here are for incentivizing actual direct client referrals.

 

 

Tips for Effectively Promoting Your Veterinary Practice with Referral Marketing

Referral marketing is only as strong as the system and strategy put into place to support your referral program. Without a proper strategy, you are just hoping for the best: that clients will shout your business from the mountaintops. Unfortunately, that is not usually the case. Here are some tips to increase the effectiveness of your referral program.

Just Ask

• This seems simple, but surprisingly many practice owners hesitate to ask for a referral -- or instruct their staff members to ask. They often feel that cheapens their brand or that it sounds desperate. But honesty and tact go a long way. If Mrs. Smith is smiling and grateful when she leaves her appointment, ask her to share her experiences with her friends and neighbors. People LOVE talking about their pets, and you can give them another reason to do so!
• It is sometimes difficult to get people to think about you and your business after they leave, so asking them and following up for referrals is essential. It trains their mind to start thinking of how they can help, and whenever a family or friend needs your service, your business is top of mind.

 

Use Your Entire Network

Beyond your existing bonded clients, don’t be afraid to reach out to everybody you know in your personal and professional network. You work with specialists, pharmacists, distributors, vendors, and groomers, and they should all know what makes your practice great. They, in turn, work with the pet owners in your community in their own ways, so these folks could be wonderful sources for referrals. 

 

 

Incentivize

• If your clients have fantastic experiences in your practice, sometimes they naturally promote your business to others. However frequently, they’ll require some sort of nudge to “go out of their way” to talk up your practice. An organized incentive structure can provide just the nudge you need to turn clients into cheerleaders. Keep in mind, your incentive does not have to be grand or expensive. It can be a small promotion for each referral. Some examples include:
  1. For each referral, clients get somewhere between $10 and $50 credit towards services at your practice.
  2. For each referral, give away a free shirt or coffee mug (with your logo, of course!).
  3. For each referral, provide a complimentary low-cost service such as a nail trim.
• As mentioned earlier, you can promote your practice via referrals without providing discounts. You can offer thanks with small complimentary services, or you can show your gratitude with reward items that are not tied to your services.  The critical point here is finding that balance because you do not want to offer so much that it drives up the cost per referral.

 

Track Your Referrals

Your practice management system, such as AVImark or Cornerstone, is a great place to start. Most practice management systems have excellent record-keeping features. Are there notes, flags, or reports that you can use to monitor how often your clients are providing recommendations? Along with your new client numbers, these figures will give you a picture of how your business is growing and show you where you can do even better.

 

 

Keep it Simple

Lastly, you want to make it easy for your referrers. The less your referrers have to do, the better. Provide them with informative resources they may need to promote your business. Resources like:

• A simple landing page on your website where they can send their friends and family.
• A templated email that introduces you and that referrers can use to send information to potential new clients.
• A referral card - yes, a paper card! Your best clients may want to have a few of these on hand so that they can jot their names down as referrers. Then new clients can present these to your receptionists on their first visit.

 

Need Help Getting Started with Referral Marketing?

Referral marketing is one of the most powerful and low-cost forms of marketing available for any business. This marketing tactic leverages credibility and trust between your business and your existing clients to reach into their local networks.

Believe it or not, your business probably already has new clients coming in through some type of referral or word-of-mouth. Setting up a structured referral program can help you turn this into a reliable, regular source of new clients.

We’d love to talk to you about how working with Success Coaches and experts here at GeniusVets can benefit your veterinary practice moving forward. Contact us here to talk about the next steps.