One of the best possible ways to bring in new customers is by ensuring that your existing customers are advocates for your products and services. When you have a group of customers who love what you do, positive word of mouth can significantly benefit your business. Think about it for a moment. Are you more likely to trust a stranger about a product to meet your needs or a friend?
The main issue with word of mouth as advertising is that a business can’t completely control it. You have to trust your customers to pass on exciting information about what you do. And that might not be as easy as you think. Even offering excellent service doesn’t mean that referrals will happen. That’s why having a program specifically for customer referrals can be such a good idea.
Why to Build a Customer Referral Program
There are several great reasons to implement a customer referral program for your company. It can help you retain your existing customers. It lets you reach your revenue goals. It also gives you an option to grow your business. Merely having a referral program is useful since it shows that you believe in your company enough to think a referral program is an excellent investment. It also shows that you know some customers aren’t going to refer others unless there’s a good reason for them to.
The reality is that customer referrals are highly valuable since it costs little to nothing to bring in those new customers. Even if you invest money into the process, it’s worth it. Not only do you get someone new as a customer, but once they realize how great your business is, they may refer other people. It’s a never-ending cycle that can be a fixture of any marketing plan.
Setting Your Customer Referral Goals
You wouldn’t be researching customer referral programs if you weren’t interested in the idea of them. So, now is the time to think about why a referral program is something you want to have. Do you want retention? Are you interested in revenue and growth? Do you work in a sector that requires more trust than others? Determine what your goals are before moving forward and the entire process will be more straightforward.
From that point, it’s essential to decide how referrals are currently reaching the business. Talk to the support team, marketing workers, and sales management associates to determine how referrals have been dealt with in the past. This will help you see where you are currently and how you can build off of it.
List Referral Sources and Reach Out
Find the people who might be interested in bringing you referrals, whether those are people you’ve connected with in the past or people you see a lot of right now. Make a list of those individuals. It can include past customers, current customers, industry leaders, unclosed leads, vendors, and more. Having this information gives you a base to start from.
After you have your list, whittle it down to the best contacts. These are the people who know the value you offer and are likely to refer even without an incentive to do so. Next, choose the right time to speak to those people. Think about whether this should occur early or late in a relationship and then act on that knowledge. Ask for referrals and wait a while before doing it again.
Decide on Appropriate Incentives
Incentives are an excellent way to bring in referrals, but not all programs use them. The best customer referral program will have several options and use different ones for specific contacts. Break down your list into levels and then determine what incentives are appropriate for each of them.
There should also be something good for the referrer, so they’re more likely to refer repeatedly. Consider large restaurant delivery companies as one example. Many of them offer free delivery or meals to those who are referred, but the referrer will also get a credit for a certain amount of their orders to make the referral worth their time.
Alerts Your Customers About the Program on a Regular Basis
Once your referral program is up and running and you have incentives that you think will, the next step is to let your customers know about it. Promotion is key to a customer referral program that works. Consider all the different ways you can promote the program beyond just an email campaign. Some ideas include:
- Blog posts
- Email signatures
- Product updates
After you have the programs outlined, make up resources for each of them. For instance, you should have emails for each contact to explain the program. Add a message that explains which customers are the best fit for your company. Consider a landing page where contacts can input their friends’ information, a workflow that takes contacts through the system, or even scripts for customer support teams to use.
Get to Work on Tracking Referrals
No matter how small or large your company is, tracking needs to be used to make the most of customer referral programs. Several things should be tracked throughout the life of the program.
- Who referred people and which people were referred
- On what date referrals occurred
- Whether the people referred bought items or converted
- How those referred are followed up with
Custom relationship management (CRM) software can make this a breeze. Customer success relies on keeping track of your relationships, so this step needs to be followed. It lets you individualize each person who works with your business, which will make them feel more connected.
Show Gratitude for Referrals
Make sure that you tell the referrers how grateful you are for helping you. This can be done through incentives but messaging them a quick thank you is also vital. You should also reach out to the referred person to thank them for joining. Once that’s done, it’s time to start wowing all the customers so you can keep building your business!
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