The way a referral program works is simple: Offer an incentive to existing clients when they recommend your product or service to friends and family. Your customer gets rewarded, you earn a new client, and the new client gets a product or service they were looking for (and, perhaps, a reward for choosing you). It’s a win-win-win for everyone!
Whether you currently offer a loyalty program or not, you can still set up a referral program for your business. The key is to come up with the right referral program that gets your current customers excited enough to participate.
Give your customers a reason to refer their friends and family: a reward.
The first step is to find out what kind of reward works best for your customer base. Don’t be afraid to test out some ideas! The traditional approach—and one that continues to work—is to offer a discount or cashback to customers who refer you to friends and family. If you already have a loyalty program, you can also reward them with points/miles/etc. Try different incentives to see what works best with your customers. Remember: You don’t have to offer a large discount, else you risk investing more money for no additional return. You need to find that sweet spot in between, and set your rewards at that amount.
Offering a product or service as a reward
This is a great way to increase brand loyalty, and can often encourage active customers to recommend your business. Get creative! Think about what your clients really value. Take a look at your products or services, and use your customer data to guide you, and decide what would be a good offer.
Standing out means offering customers an exclusive benefit. And what’s more exclusive than giving clients something money can’t buy?
Many referral programs offer benefits to both the new client and the customer who referred them. This is a great strategy for encouraging customers to continue to refer family and friends to your business. Make sure your incentives are worth it to both parties. You may also want to think about adding reward tiers for customers who refer a lot of new business your way.
Promote, promote, promote
Once you have a referral program, be sure to promote it. A referral program that works is one that’s widely promoted. Be sure to mention it in all your communications to customers as well as on social media. Once a client has made a purchase with you, send them a message about your referral program so they can pass along the recommendation while it’s still fresh in their minds and get rewarded.
Want to start your referral program? Think about what your customers really want and the simplest way you can give it to them. Dont’ be afraid to test and come up with a program that gives clients what they’re looking for and rewards you with new customers for little investment.
