Should Referrals Be A Bigger Part of Your Boomer / Senior Marketing Mix?
Continuing care retirement communities (CCRCs) and other businesses marketing to Baby Boomers and active adults frequently ask us about new technologies, or how much time and money to invest in social media/social engagement. Problem is, they often forget the power of an “old-school” marketing tool: personal recommendations or referrals.
Word of mouth/referrals are, indeed, powerful with all ages of consumers. As John Jantsch puts it in his description of his new book, “The Referral Engine:”
The power of glitzy advertising and elaborate marketing campaigns is on the wane; word- of-mouth referrals are what drive business today. People trust the recommendation of a friend, family member, colleague, or even stranger with similar tastes over anything thrust at them by a faceless company.
Effectiveness of Referrals in Health, Travel and Financial Services Industries
Referrals have an impact in all stages of a purchase decision, from when consumers decide which products to consider, to when they evaluating options to when they make a decision to buy.
The reality is that there is no way you can “test drive” a holiday to Bali. There are no in-store samples when it comes to choosing healthcare or financial services. The statistics below show the importance of recommendations and word of mouth in those industries where product/service “demos” aren’t easily come by.
• 50% of the 17 million adults who found a new primary care physician in the past year relied on recommendations from friends and relatives. More than 25% used such recommendations as their only information source. (Center for Studying Health System Change)
• At AAHSA in 2008, a presenter shared statistics from Shouldice Hospital which counted 49% of new patients as referrals from past patients. (American Association of Homes & Services for the Aging)
• 34% of UK vacationers told consumer research group Mintel that they chose their destination on the basis of a face-to-face recommendation. Another 27% used online word of mouth sources such as user reviews. (TravelWeekly)
• And, in financial services, an Alliance Bernstein study of people with a minimum net worth of $25 million found that 100% of respondents used referrals when searching for a financial advisor. (Advisor Perspectives)
Are Retirement Communities Leveraging Referrals?
Like many health-related businesses, our CCRC clients note that referrals are their best sources. Prospects who are introduced to them through current or past residents are most likely to purchase.
So why aren’t more CCRCs taking better advantage of good ol’ fashioned referral marketing?
It’s not because retirement communities or assisted living facilities are failing to earn fans. McKnight’s Long Term Care News reports that most nursing home workers would recommend their facility to others – as would 85% of the residents of these homes and their families.
It’s not because older adults are stingy with praise. In fact, they are asked for their recommendations with great frequency. Here are some Baby Boomer statistics to consider: A 2007 Weber Shandwick studyfound that 57% of 50+ers were asked to recommend a product or service nearly twice a week. And recommend they do – 89% of Boomers surveyed had given advice on products or services.
What do you think?
Are businesses in general – and retirement communities in particular – spending enough time on generating referrals?
Please share your thoughts … or examples of groups effectively using personal referrals from Boomers and seniors in their marketing … below.