The Wikipedia definition of referral marketing is “a method of promoting products or services to new customers through referrals. [These]… often happen spontaneously but businesses can influence this through appropriate strategies.”

During a recent trip to Taiwan, I was inspired by a case of referral marketing for a B&B and its owner, Rihang. His case of a successful referral can help spark some ideas on how to react when a referral comes your way for your own small business. (Hint – there’s a checklist summary at the end.) This is not a full article on referral marketing (There are entire books dedicated to the craft!) but rather observations of a case of successful referral marketing and suggestions on how to react to referrals when they come your way.

SETTING THE SCENE

Hiker and cyclists are attracted to the Taroko Gorge in central Taiwan, a rural town with a massive national park and mountain area that’s perfect for outdoor activity. The city itself is called Taroko, but it’s a small town with limited options in terms of restaurants and accommodations. The next closest city is 30 minutes away and happens to be the second biggest city in Taiwan, Hualien. Though there are more accommodation options there, many travelers wanted to be closer to the park itself.

REFERRAL MARKETING

During the research phase of planning my trip to the Taroko Gorge, I evaluated my options to stay near the park or quite a taxi ride away. My Lonely Planet guidebook was the starting point for investigating the options and then later I went to read reviews online in order to select the best option for my needs. Why do I mention this? The shopping process is important to think about; buyers will often use two or more resources to help find and make a decision, and good reviews are crucial in this stage because 61% of buyers read reviews before making their purchasing decision.

Lonely Planet mentioned a place called the Taroko Lodge, so I decided to start looking at reviews. The one that sealed the deal was a travel blog post written by Anne Betts, who had written about her outdoor adventures in the Taroko Gorge and her stay at the Taroko Lodge, giving the B&B and its owner Rihang rave reviews.

Upon arrival, I noticed immediately that all 11 of the other guests were also English-speakers, either from the States or the UK. There were a couple French and German folks, but English was their main way of communicating in this country. Out of curiosity, I asked them how they’d discovered the Taroko lodge, and most of them referenced Ms. Betts’s travel blog post. Her positive review not only helped boost Rihang’s online discoverability but also increased the number of reservations made by English-speakers.

REACTING TO THE REFERRAL

Although Rihang may not have started his business with English-speakers in mind, he has jumped at the opportunity and caters to his new target niche’s needs. Visitors with little or no mandarin skills can have quite a bit of difficulty getting around in rural areas in Taiwan. Even ordering food or asking for directions can be an ordeal. Rihang recognizes this need to bridge the communication gap and facilitate the various aspects of an English-speaker’s stay.

For example, some of the hikes require a permit from local law enforcement. He offers to apply for those permits on your behalf to avoid miscommunication with local Taiwanese officials and possibly lose out on the opportunity to explore the park. He also set up a WordPress page in English and drafted up a confirmation email for English-speaking visitors that clearly explains prices and time tables. He’ll also accompany hungry guests to a local restaurant for dinner, explain their options and even order for you, as most restaurants don’t have English menus or English-speaking staff.

GLEANING INSIGHT AND LIVING UP TO EXPECTATIONS

Rihang recognizes that good reviews and highly-visible recommendations are the goal in referral marketing, but also acknowledges they are not the finish line – there is follow-up to be done.

First, it’s always nice to thank someone for a good review. You can do it discreetly if you wish, or you can write a short comment underneath the post (if it’s a blog) telling them how glad you are to hear they liked your product or services. If you like the review a lot, why not add it to your own website? There are plenty of widgets to add reviews, or you can add a page called “Testimonials”. Write 2 or 3 sentences about the review and then link back to the original page. This way you are creating a symbiotic relationship with the reviewer by providing traffic to their website as well.

You’ve also got to deliver. Anne Betts says, “Rihang is an exceptional host who cannot do enough to satisfy the needs of his guests.” Those are quite complimentary words of praise, so now he has to live up to that reputation. (He most certainly did during my stay!) In your own business, make sure that the positive things people say about you are true. Really listen to them – unsolicited praise can give you some insight into what makes you different or unique from other hotels. In Rihang’s case, what made him an exceptional host? For many, it was his work to make English-speakers feel comfortable, pick which outdoor activities and adventures to embark on, and bridge the communication gap. If Rihang had ignored the insight about that last bit, he wouldn’t be capitalizing on all that the review had to offer or learning from the insight it provided.

It’s also important to keep those positive referrals coming. As I mentioned before, I didn’t find Taroko Lodge solely through Betts’s blog. Instead, I used various sources that corroborated the recommendation – your potential consumers will do the same. Remember that when asked, approximately 71 percent of consumers will leave a review for a business. So if you feel that there is merit to be had, what’s the harm in asking?
Let’s hope your business receives many positive reviews in the near future. And when you do, here is what you can take away from Rihang’s case and apply to your own business when the time come:

  1. Thank the reviewer. A simple comment will do, but they’ve already done you the favor of recommending you. Acknowledge their effort and keep building the positive relationship.
  2. Re-use the review. Add the review to your website. Make sure not to plagiarize the entire review but rather use a couple sentences to summarize or paraphrase a part of the review and then add a link to direct traffic back to the main reviewer.
  3. Get some insight. Re-read review and list out what attributes were complimented. Is it what you expected? Do many reviews say the same things? If many of your reviews list the same characteristics, those are probably your main selling points that consumers are looking for. By knowing what your target niche is most complimentary of, you’ll know how to take it one step further and re-evaluate your marketing. Do your unique selling points lining up with what customers are complimenting you on? If not, maybe it’s time to think about changing your messaging.
  4. Live up to expectations. After getting a referral, you’re not done. Make sure you live up to the expectations the reviewer has set up for you. Their reputation is on the line – and so is yours.
  5. Ask for more. Consumers read more than one review when deciding whether to purchase a product or service. That means you’ll want to have several online sources citing you as a quality business. Don’t be afraid to ask happy customers for referrals on Yelp or other sites– chances are they’ll be more than happy to give them.

Have any other suggestions for what to do when you receive a review? Let us know in the comments below!