How to Get More Referrals: Setting Up a Referral Program


August 28, 2018 By

Cheryl Dykstra

Before we delve into the logistics of setting up a referral program, take a second to think about the first place you turn to when you’re looking to purchase a new product or service.

Usually you turn to a friend or family for a recommendation.

In fact, a study by Nielsen showed that people are 4 times more likely to buy when referred by a friend.

Another study done by the Wharton School of Business discovered that the average lifetime value for a new referral client is 16% higher than non-referrals.

So how do you take that referral magic and turn it into a more automated system that will continue to provide your business with fresh, quality leads?

Set up a referral program!

What is a Referral Program?

The best way to get referrals for your business is to start with amazing products or services. When people are impressed with what you offer, it’s more likely they’ll spread the word.

However, happy clients don’t always think to tell their friends or family about your business without someone asking them directly about it. If no one ever asks, they never tell anyone.

A referral program is a process in which clients are rewarded for telling their friends, family, or other people about your business.

For example, a carpet cleaner might offer clients 20% off their next service for referring a new client. The new client would also receive the same deal for their first appointment. There is an incentive on both sides to spread the word by referring a friend and act on the referral by booking an appointment.

This type of referral system can work on just about any type of business in any industry too. You just have to find the right offers to incentivize your clients.

Setting Up a Referral Program

While it may seem easy enough to set up a referral program like the one described, building them for more sophisticated business models is more complex.

Here are a few of the things that will need to be accomplished in order for your referral program to be successful…

1. Pick a reward that motivates

Having a referral program is very dependent on your clients feeling motivated to share their experience with others. Therefore, your program needs to give rewards that match their motivations.

To figure out what type of referral program will work with your clients, think about what they’d benefit the most from.

For example, a cosmetics brand’s clients might like to receive a free product or sample for making a referral. Meanwhile, clients of a software company might prefer an account credit or access to a paid feature for free.

There are a ton of ways to reward your clients and their referrals, just make sure whatever it is, fits your company. It’s also important to remember that the same types of incentives won’t work for all clients. It takes a little A/B testing to figure out what will work best for your specific business.

2. Share your program

Once you have your rewards planned out, the next step is to share your program with your clients.

Promote your referral program just as much as you would advertise your business to new prospects. If you want people to be promoting your business or your products, you have to let them know why they should AND what’s in it for them.

Post it on social media, write about it on your blog, send out email reminders, mention it to clients in person, include a note in all of your delivered packages – whatever you have to do to make sure people know about it.

The more your clients are aware of the benefits, the more referrals you’ll see come in.

3. Reduce friction

Getting clients interesting in sharing the word about you is only half the battle. The next step is to help them sell it!

Create some sharable content for them to post on their social media or to email to their friends. Set up promo codes to share.

Then make sure that you’re not making the referral process too difficult. Make it quick and easy for your clients and their referral to get their reward.

4. Analyze and optimize

Just like with other aspects of your marketing, a referral program will have some kinks to work out before everything is running smoothly.

Running tests, analyzing the results, and adjusting where it’s needed is an essential part of the “set up” of your program.

You might find that a certain incentive works better than another or you might find that having the referred client enter in their phone number and email address reduces the number of conversion. Tweaking these types of things can increase your number of leads tremendously.

5. Follow through

Possibly the most important part of your referral program is making sure your follow up process runs smoothly. If someone is willing to share your referral program with a friend of family member, you can be sure they’re willing to share if they had a bad experience with your referral program.

Make sure if you set up a program, you are able to respond in a timely manner and follow through on your offers. One thing that really helps with this process is a customer relationship management system (CRM). A CRM can allow you to set up automated responses to your current clients and referred clients with their offers.

Having an automated response for referrals makes it easy to ensure everyone stays happy and allows you to focus on your business.

Referral marketing programs have the power to increase your business 25-50% within a year. When coupled with a CRM, they can work like an invisible selling machine operating in the background.

If you’re interested in setting up a referral program for your business, call us at (407) 682-2222 for a free consultation with one of our marketing experts.

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