3 Ideas for Your Customer Referral Program

Posted 5 November By Hanju Lee—Marketing Strategy—No Comments

3 Ideas for Your Customer Referral Program

Pause for a moment and think of all the services you currently use in your life; your financial advisor, your dentist, your hairdresser, your house cleaning services. Chances are, you were recommend to them by someone you know. Even in your business, your IT services, the printer you use, your accountant, your creative services (wink wink), even to the coffee you drink were probably given to you as a reference from someone else, right? Studies show that 71% of online shoppers read reviews before buying. What others think about your business is important to them. Studies also show that referred customers were both more profitable and loyal than normal customers. Referred customers had a higher contribution margin, a higher retention rate and were more valuable in both the short and long run. (see the actual study published) On top of that, customers say that referrals rate #1 in the utmost importance in determining who they buy from, what they buy, and what services they hire.

We trust people who are trusted by the people we trust. Say what? Okay, I’ll say it again. We trust people who are trusted by the people we trust. We naturally seek out wisdom and experience from people we know and trust, and the more credibility that they have, the more influential they become in the decision making process. I was meeting with a potential client a few weeks ago and about half way through the meeting, I realized that our conversation was already moving towards intricate details about the project. Apparently, the decision to choose my services was already made. His comment to me was that he completely trusted the person that referred him to me and that was more than enough to make his choice. We trust people who are trusted by the people we trust.

Ninety two percent of consumers trust recommendations from friends and family above all other forms of advertising.

So now knowing that referral marketing (word-of-mouth marketing) is effective and powerful, how do we implement it into our own business? Here are 3 ideas to consider.

1. Ask for it: Once you deliver the excellent services your customers expect and they recognize you as a credible, valued resource, just simply ask them in person or in email to refer you to others that need your services. It a very logical and organic next step in the relationship. Technology can also come into play by simply sending them a survey through a free service (Survey Monkey) or ask them to rate you on a third-party site such as Yelp and/or Insider Pages that combines customer reviews. Also, ask for testimonials that can be incorporated on to your website and your social media platforms.

2. Coupon it: Print coupons that show %OFF or $OFF your service and distribute a handful to your clients for them to pass on and even for their own use for their next service. Make the offer simple and easy to understand and make sure the client’s information is noted on the coupon so they can be acknowledged when the coupon is being used by a new customer.

3. Reward it: Offer an incentive that they cannot ignore: cash, gift cards, free services, a hug or a high five. Whatever it is, make it awesome. Create a simple online form for your clients to submit referral client information, and when those referrals become your paying client, pay the big reward. Here’s the online form I created to capture and to reward my clients. By the way, feel free to fill it out and recommend me; there will be a $100 CASH for your reward as your referrals contract me for website services!