Recently, we’ve been talking about the power of referrals, as well as how to capture more of them using something called the E.A.R. method.
Today, we’re going to take this topic one step further by discussing how to create a referral program for your business—not just any old referral program, but rather, one that really works and generates a steady flow of new customers for your business!
Why Are Referrals So Important?
As a business owner, imagine how much time and money you might save—not to mention the sheer impact you might have—by empowering your customer base to go out and bring in new customers for your business.
Referrals are the best source of new customers for a business, and there’s a clear and obvious reason for this.
The truth is that a glowing recommendation from a real customer means significantly more than any claims or guarantees you might be able to make to a prospect. In a digital world where people are increasingly wary of being hoodwinked by a potential online scam or unnecessary purchase in an already saturated market, it’s common for people to put up walls that prevent you from reaching them.
However, a recommendation from a trusted friend or family member holds a great deal of weight—to the point where a genuine referral can help your business break through this marketing barrier and reach prospects that you would never have had the opportunity to reach otherwise.
With this in mind, any amount of money you invest in a referral program is usually money well spent—allowing you to grow sales numbers across the board!
How to Create a Killer Referral Program for Your Business
Ready to roll out your new referral-generating rewards program? Of course, the very first thing you need to do is make sure that you’re wow-ing your customers. By this, I mean that you need to deliver not only an exceptional product but also a level of customer service they are unlikely to find elsewhere. Without this, you’re going to struggle to generate any referrals—regardless of how enticing your rewards may be!
Assuming that you’re already putting your best foot forward and wow-ing your existing customers, however, you can generate a higher percentage of referrals by implementing a structured program.
The first thing you will need to determine is how to best incentivize referrals. You may opt for something as simple as a small “thank you” gift or gift certificate per referral, and some businesses manage to have success with this type of reward.
However, if your goal is to have as many of your current customers participate as possible, you’re going to need to pull out all the stops. If you’re able to generate enough volume, consider offering a large monthly prize for the person who delivers the most referrals to you in that period. This is an especially effective strategy in the retail or wholesale space, where there’s plenty of volume.
You might also modify your program to feature a raffle, where each referral earns one entry toward the big prize. You can generate even more excitement around your program and keep it top of mind by featuring each month’s winner in your company’s newsletter!
While a big-ticket item might seem like an exorbitant prize to be giving away each month, compare the cost of that item to the lifetime value of a new customer. Chances are that it pales in comparison to the profits you’re able to bring in with new customers, especially when you’re suddenly generating 10, 20, or upward of 50 new referrals through your program!
Already have the perfect incentive in mind? Follow these simple steps to launch your new referral program:
1. Design Your Referral Appreciation Program
While a referral program might not seem complicated from the outside looking in, you’ll find that there are plenty of details to iron out before you can implement it. Set specific goals, choose your incentives and have them in stock, and identify the best ways to promote your program.
2. Implement the Program and Track the Results
Once you have sorted out the details of your new program, it’s time to set it in motion. Make your existing customers aware of what they must do to win the ultimate prize. As with any campaign, track and analyze your results, and adjust as needed!
3. Always Remember to Say Thank You
Although you may feel as though customers are already being well-compensated with your reward program, don’t forget to say thank you whenever they bring in a new customer. Remember, they don’t owe you anything!