I recently read the results of a survey that asked major companies where most of their customers come from. A whopping 85 percent said referrals are their number one source of new business. Does this sound like your business? It certainly sounds a lot like ours!
Where do referrals come from? Your current customers of course. They are the ones that are buying from you and know what it is like to do business with you. How do you get them to give you a referral? Reward them!
To gain new customers using a referral program, set up a formal structured referral program that benefits everyone. For example, we designed a referral program for a client which included in-store posters, a mail out/bill stuffer and social media which targeted existing followers, some of which were customers. Each person who referred a new customer was given a reward – make sure it is something worthwhile. The program was also extended to staff members to promote the referral program to their customers. Everyone bought into the program.
Did this work? Yes, because they had buy-in from everyone in the company. The program ran for about a year and a half and was then put on hiatus. Why? Because it attracted so many new clients, they were getting too busy to service them all.
How about offering something like a $50.00 or $100.00 incentive to refer. It might seem like a lot of cost at the start of the program, but think of the long-term value of that new customer. In most cases, the cost of the referral pays for itself many times over. If you are going to run a referral program, make sure it is well planned, structured and you get your staff on board. It does pay off.