What has long been called “word of mouth marketing” has re-emerged as a very profitable mechanism in today’s social world. In a new article exploring the value of turning “social capital into economic capital”, the writers at Knowledge@Wharton have taken an in-depth look at today’s referral program. It is certainly understood in financial services that referrals are a core component of building the business – and this also translates to our neighborhood small businesses, and for that matter, our business here at QuonWarrene.
As they smartly opened the article with:
“If your hair stylist gave you $10 every time you sent one of your friends her way, you might be more tempted to tell all of your buddies what a fabulous stylist she was — or you might even try to make new friends to refer.”
In our view (not unique we would assume) by making doing business easy and clear, delivering what we state we will provide with premier customer service – it is not a challenge to discuss referral business with our clients. Equally compelling in today’s socially interconnected world – does this translate to social media – enabling you to leverage these satisfied client relationships to extend to their friends & followers on Facebook, LinkedIn and Twitter?
Does the referral tweet, Facebook post or LinkedIn InMail carry as much (or more) weight than the traditional word of mouth? We believe it is at minimum equally as important as our offline efforts to connect with clients and their peers. Thus we maintain a presence (this blog) online, as well as a LinkedIn and Twitter.
Read more to review results of a study of a referral program at a German bank – assessing if customers won through the referral process can be more profitable and more meaningful relationships. While the piece does not span into social media in detail – the analysis of the study is compelling and most certainly some financial institution will be (or is) exploring this now from a social networking perspective.