{"id":5078,"date":"2024-05-06T16:27:18","date_gmt":"2024-05-06T09:27:18","guid":{"rendered":"https:\/\/libcondemo.bangkokwebsitedesign.com\/?p=5078"},"modified":"2024-05-06T16:49:25","modified_gmt":"2024-05-06T09:49:25","slug":"referral-sales-in-management-strategy-sales-2-3","status":"publish","type":"post","link":"https:\/\/libcon.co.th\/en\/referral-sales-in-management-strategy-sales-2-3\/","title":{"rendered":"Referral Sales in Management Strategy Sales 2\/3"},"content":{"rendered":"\t\t
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Referral Sales in Management Strategy 2\/3<\/b><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\tIn the last entry, the importance of shifting from Customer Lifetime Value (CLV)\r\nto CRV (Customer Recommend and Referral Value).\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\tThis time, we would like to explain the detailed actions that should be taken to maximize CRV.\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t<\/h2>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The following four main actions were previously mentioned:<\/b><\/p>\n

    \n
  1. Selection of a customer who refers other customers to the company<\/span><\/li>\n
  2. Identification of the company\u2019s product or service characteristics that could lead to referral<\/span><\/li>\n
  3. Communication method and point of contact with potential referral customer<\/span><\/li>\n
  4. Introduction of an organized system that supports the standardization of new referral sales, known as the 4S framework for referral sales<\/span><\/li>\n<\/ol>\n<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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    4S: 1.<\/b> Segmentation <\/b><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    To carry out the referral sales strategy, segmentation is the first action that should be taken. As it is inefficient to target all, segmentation of customers should be conducted at the onset to narrow down the target group.<\/span><\/p>\n

    Criteria for customer segmentation<\/i><\/b><\/p>\n

    Here, the criteria for narrowing down the target customer group is important. The aim of segmentation is the \u201cselection of customer to strengthen referral.\u201d<\/span><\/p>\n

    For example, to stimulate repeat purchases, RFM analysis, which analyzes customers based on the following three criteria: \u201crecency\u201d (most recent purchase date), \u201cfrequency\u201d (purchase frequency), and \u201cmonetary\u201d (most recent purchase value), are considered effective. However, the target of a referral strategy is only customer referral and word of mouth, at the most. Therefore, a customer management principle that is completely different from RFM analysis is necessary.<\/span><\/p>\n

    For the referral sales strategy, customer segmentation, on the other hand, is based on \u201creferral tendency\u201d (referral record and recommendation tendency), \u201csatisfaction,\u201d and \u201cmost recent contact.\u201d<\/span><\/p>\n

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    • Referral tendency<\/b><\/span>
      \n<\/b>Firstly, referral tendency could be viewed from two perspectives: One is referral records, and another is recommendation tendency.<\/span><\/li>\n<\/ul>\n

      Customers who have referral records in the past have a high possibility of being referred again. As for recommendation tendency, it is necessary to conduct Customer Satisfaction (CS) surveys and others to assess the intention of recommendation.<\/span><\/p>\n

        \n
      • Satisfaction<\/b><\/span>
        \n<\/b>As for satisfaction, the setting of the evaluation criteria such as quality, price, and service speed is necessary.<\/span><\/li>\n<\/ul>\n

        In this category, factors that contribute to customer satisfaction and the \u201cextremely satisfied\u201d line should be determined.<\/span><\/p>\n

          \n
        • Most recent contact<\/span><\/strong>\n

          <\/b><\/li>\n

        • Timing of the most recent contact is also an important decision making criteria.<\/span><\/li>\n<\/ul>\n

          Even though the customer has high satisfaction and referral records, if the most recent contact is 5 years ago, there is a possibility that he may no longer be a valid choice.<\/span><\/p>\n

          Even though the number could be different for each business, a standard period of time such as \u201ccustomers with a contact within two years\u201d must be decided.<\/span><\/p>\n

          As previously mentioned, in order to conduct such segmentation, CS survey is necessary and must be conducted on a regular basis, such as, at a customer\u2019s first purchase.<\/span><\/p>\n

          Next, these three segmentation criteria are used to categorize customer into ranks. The categorization of customer into ranks contributes to an extremely efficient customer approach as an organization.<\/span><\/p>\n

          Figure 1 shows an example of cost distribution and detailed approach for each customer rank.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          4S: 2. Satisfaction<\/b><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          In referral sales, how to create as many customers with high recommendation tendency as possible is the issue. Therefore, it is important to clarify \u201cwhat factors strongly influence recommendation tendency\u201d.<\/span><\/p>\n

          The correlation between recommendation tendency and satisfaction<\/span>
          \n<\/span>Figure 2 summarizes \u201cthe relation between repeat purchase percentage and customer satisfaction.<\/span><\/p>\n

          From this data, it can be observed that the level of loyalty rises slowly from \u201cExtremely unsatisfied\u201d to \u201cSatisfied\u201d but rises sharply to \u201cExtremely Satisfied.\u201d<\/span><\/p>\n

          This proves the significance of the \u201cExtremely satisfied\u201d level in CLV.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          The next graph is a case study from a certain B2B company showing the relationship between satisfaction and referral tendency.<\/span><\/p>\n

          This graph is similar to the previous one in such a way that the percentage of referral tendency increased steadily until \u201cSatisfied,\u201d suddenly taking a big leap to \u201cExtremely Satisfied.\u201d<\/span><\/p>\n

          From the graph above, it can be seen that when dealing with referral tendency, it is important to focus on \u201cExtremely Satisfied,\u201d not \u201cSatisfied.\u201d<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Let\u2019s take a look at the case of one housing sales company. Due to housing being a sector with low-purchase frequency and high-price products, normally, there are no repeat sales, and aiming for referrals is inevitable in this business.<\/span><\/p>\n

          The document above is a questionnaire conducted on customers who purchased from the housing sector, questioning \u201cWhat are you satisfied about the product?\u201d<\/span><\/p>\n

          From the answers, \u201csize,\u201d \u201ccolor coordination,\u201d and \u201csales service\u201d are found to have the highest correlation with referral tendency.<\/span><\/p>\n

          Based on the result of the questionnaire, the company determined \u201ccolor coordination\u201d to be the most effective factor in increasing referral tendency, and the company took the measure of increasing the discussion time largely for color coordination.<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Timing affects referral tendency<\/b><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Another factor that affects referral tendency is timing. The best timing is \u201cthe time in which the customer has the highest satisfaction and interest\u201d in the buying process.<\/span><\/p>\n

          Therefore, when considering referral tendency, the extent to which referral activity is promoted during the period of a customer\u2019s high satisfaction and interest is important.<\/span><\/p>\n

          Generally, there are three points at which the customer\u2019s satisfaction becomes higher. The case of a system development company will be introduced as a B2B business example.<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          The three points in time at which the customer\u2019s satisfaction increases are, firstly, \u201cafter signing contract,\u201d in which the customer spent time choosing one company among several competitors.<\/span><\/p>\n

          Next is \u201cwhen the system is completed,\u201d which pertains to going through several meetings and progress reports, and finally, after completing the inspection period, the product is completely handed over to the customer \u201cduring the final check.\u201d<\/span><\/p>\n

          As a company, understanding this satisfaction curve is important. Similarly, organizing detailed actions that are effective in increasing satisfaction and creating a reproducible task flow is just as significant.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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          In this article, the first two Ss of the 4S framework of referral sales strategy were introduced. In the next column, the remaining two Ss, \u201cSales\u201d and \u201cSystem,\u201d will be presented.<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

          Referral Sales in Management Strategy 2\/3 In the last entry, the importance of shifting from Customer Lifetime Value (CLV) to CRV (Customer Recommend and Referral Value). This time, we would like to explain the detailed actions that should be taken to maximize CRV. The following four main actions were previously mentioned: Selection of a customer […]<\/p>\n","protected":false},"author":1,"featured_media":5089,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"class_list":["post-5078","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-en"],"yoast_head":"\nReferral Sales in Management Strategy Sales 2\/3 - LiB Consulting - \u0e43\u0e2b\u0e49\u0e04\u0e33\u0e1b\u0e23\u0e36\u0e01\u0e29\u0e32\u0e25\u0e39\u0e01\u0e04\u0e49\u0e32\u0e17\u0e35\u0e48\u0e21\u0e38\u0e48\u0e07\u0e40\u0e19\u0e49\u0e19\u0e01\u0e32\u0e23\u0e2a\u0e23\u0e49\u0e32\u0e07\u0e1c\u0e25\u0e25\u0e31\u0e1e\u0e18\u0e4c\u0e17\u0e31\u0e49\u0e07\u0e14\u0e49\u0e32\u0e19\u0e01\u0e25\u0e22\u0e38\u0e17\u0e18\u0e4c<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/libcon.co.th\/en\/referral-sales-in-management-strategy-sales-2-3\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Referral Sales in Management Strategy Sales 2\/3 - LiB Consulting - \u0e43\u0e2b\u0e49\u0e04\u0e33\u0e1b\u0e23\u0e36\u0e01\u0e29\u0e32\u0e25\u0e39\u0e01\u0e04\u0e49\u0e32\u0e17\u0e35\u0e48\u0e21\u0e38\u0e48\u0e07\u0e40\u0e19\u0e49\u0e19\u0e01\u0e32\u0e23\u0e2a\u0e23\u0e49\u0e32\u0e07\u0e1c\u0e25\u0e25\u0e31\u0e1e\u0e18\u0e4c\u0e17\u0e31\u0e49\u0e07\u0e14\u0e49\u0e32\u0e19\u0e01\u0e25\u0e22\u0e38\u0e17\u0e18\u0e4c\" \/>\n<meta property=\"og:description\" content=\"Referral Sales in Management Strategy 2\/3 In the last entry, the importance of shifting from Customer Lifetime Value (CLV) to CRV (Customer Recommend and Referral Value). This time, we would like to explain the detailed actions that should be taken to maximize CRV. 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