Nice Referral Strategy…

“If it wasn’t for this bad marketing we’ve got, we’d have no marketing at all.”  – Like every business owner you know.

And here I thought this was going to be a quick trip to Costco, but instead, I got great blog fodder!

OK, so here’s the deal…

I’m at Costco to pick up a case of sugar free Monster.  I’m a tad bit addicted…

At the checkout counter, I see this sign:

I torn between how poor their attempt at getting referrals is, with the fact that they are at least doing something (most business don’t… maybe even yours).

Let’s do the 25-cent breakdown shall we?

First, Costco wants people to become members because studies show that people’s cars will automatically drive to a store (or warehouse) where they are a member. That means more business for them…

Look at your local supermarket.  They have club cards, but when you go to check out, if you don’t have one, they use the store card.  Therefore, no need to join the club… No loyalty…

Costco won’t even let you in the building to give them your money without the precious membership card!

That parts great!

Everything else, sucks.

Let’s just look at one part of this. Where they are asking for a referral.

I’m checking out. Got my cash ready. The last thing I’m thinking about is how Johnny might be a good fit for Costco and should really let him know about this wonderful store where you can buy 100 rolls of toilet paper at a time.

As a member of Costco, they have my mailing address and my email address.

I’ve never received a note with my membership renewal that says, “Hey Pete, it $50 to renew your membership, but we’ve got a deal that you’re going to like. With your renewal form is a ‘Best Friends’ recommendation form. When you list 3 of your best friends that you think might be interested in the massive price savings here at Costco, we will mail them (no phone calls) some basic info on our membership, and for each of your friends that gets a new membership, we’ll give you AND them $10 off the membership!”

I would defiantly list 3-5 people who I think would want a membership, because hey, I want to save some cash.

So why doesn’t Costco do something like this?

Simple, there is no real marketing culture at their store.  They’re a one trick pony.

Get customers to buy a ton under the pretense of a great deal. Repeat.

How about sending me a email after I purchased something at their store (it’s all computerized with them, they DO KNOW), and then hit me up for a referral once I’m back at the office.  Give me the ethical bribe at that point.

Point is, when you ask is as important as if you ask.

What’s your referral strategy in your business?  When do you ask your customers for referrals?