We’ve all shopped the big box stores, whether online or in brick-and-mortar stores. And many of us have participated in their referral programs where you receive cash or free product when you refer someone who buys their product or service.
If you’re a small business, you may automatically assume that referral programs are for large companies, but you too can reap the rewards and increase your revenue and awareness.
BENEFITS OF A REFERRAL PROGRAM
Loyal Clients and Customers
When you receive a referral to your business, it’s usually by someone they know, like, and trust. These are the best types of referrals as the person who referred them is already doing business with you and is giving their seal of approval. Once they begin doing business with you, and you live up to the recommendation, retention is very high, and your list of long-term clients and customers grows.
Your community of loyal customers participating in these programs begins to feel like they have contributed to the success of your business, in addition to whatever incentive you offer.
Cheaper Than Traditional Advertising
With a referral program, you’re not spending as much to acquire new clients. And, you’re not marketing to an audience that may not be your target audience. When someone refers you, they have been asked for a recommendation from someone already patronizing your business. And in some instances, which is just as good, a friend or family member knows they need what you offer and proactively suggests your company.
Referrals are also more trusted than an ad that makes a promise you need to believe without using their product or service. Advertising can still be effective, but it may not be the right time financially for a small business. And, even if you advertise traditionally, it’s still a healthy approach to combine with a solid referral program.
INCENTIVES THAT KEEP THE REFERRALS COMING
Ideas Where You Can Make Your Own
Of course, a gift card or credit to your business is the most cost-effective. Gift cards are always a hit and can be used to purchase from your company or another vendor, such as a gas card, grocery store, or even two movie tickets or dinner for two. Based on your type of business, the latter may be more appropriate if you don’t have items for repeat purchase (i.e., you sell HVAC units) and you’re not going to give away a free HVAC system.
Many companies give both people (referer and referral) a gift as that’s even more motivation to participate.
Less is More
You now know what your rewards for referring are, so it’s time to lay it out for others to see. It’s super important that whatever you decide, that it’s easy to understand. If you’re not clear and you receive a referral, and the incentive is not what they anticipated, it’s very easy to turn that person off from making subsequent referrals.
Your explanation should include:
Terms and conditions that talk about exactly what they need to do to warrant the reward. For instance, if there’s a revenue level they need to meet (i.e., the person referred needs to purchase $100 or more), make it straightforward so if the purchase is $25, they’re not expecting a reward.
However, if it is lower than the required level, it’s still a good practice to do something as a thank you. Perhaps a discount on a future purchase or a handwritten thank-you card.
Let the World Know About Your Program
If your target audience is there, social media is a fantastic way to talk about your program. You can give a clear teaser that drives them to the referral page on your website. This method of sharing is organic and reaches a large number of people.
And as word-of-mouth, a solid referral program has the opportunity to go viral as it continues to build. And, if you receive a referral, and have their permission (critical), openly thank both the person who referred and the new lead.
Thank the person who made the referral, even if the person doesn’t make a purchase. Once they do their part, it’s out of their hands.
Make it Easy
You may have an excellent program, but if you don’t make it easy to share your information, many will not take the extra steps to do it. Try adding buttons or share icons to make it a one-two-three exercise for someone to let others know how great you are. Templates that include pre-crafted messages to share are helpful too.
If you have the capacity, give your loyal customers a referral code they can share to identify where that lead came from quickly. This exercise may need to happen later as you continue to evolve with your program, as keeping it easy will ensure you follow through.
A solid referral program, over time, builds momentum, and you end up with a network of “ambassadors” who actively send you new customers or clients—friends of friends, of friends, of friends. Ask them to leave positive reviews on Google and your social media, and watch the leads come in.
It’s easy to refer a business to 317 Virtual Services.
Refer a new client
When they become a client – you receive a $100 credit on your next invoice.