Do you have a customer referral program for your business?
Referral customers can be the lifeblood for any small business. About 80% of businesses rely on referral customers to continue to operate.
That statistic shows how important customer relationships are to your business. Without these relationships, who’s going t refer business to you?
If you’re looking to bump up the number of referrals your business gets, you need to have a system and a program in place.
Stay tuned to find out how you can implement a customer referral program for your business.
It’s Simple. Just Ask.
Be honest, when was the last time you asked for a customer referral? The 12th of never?
It’s a common problem among business owners, they’re afraid to ask for referrals. They don’t want to come across as pushy or desperate.
The reality is that people would love to send more business more way. If they love your work, and you have a long-standing relationship with them, just ask them.
Here’s something to remember and to encourage you to make a customer referral program a part of your regular operations.
More than 83% of customers would like to refer people to a business where they had a good experience. Yet, 29% of people actually make the referral.
Can you guess the reason for that disparity? If you guessed that it’s because they weren’t asked, you’re right.
When you’re starting to implement a customer referral program, you have to systematize asking. You have to get comfortable asking for referrals, too.
Show That You Appreciate Your Customers
When a customer does refer someone to you, it’s a huge sign of trust. They’re sending someone to you and trust you to take care of them.
Customers love to be appreciated, and you should make it a part of your customer referral program to thank people for sending your business your way.
It doesn’t have to be an expensive proposition, but you do need to do something to say thanks. Go beyond an email and show that you value their referral. It will encourage them to refer more business.
You can mail a handwritten personal note, or pick up the phone to say thanks. In this email and text world that can go a long way to make an impression.
If you want to spend a little money, you can send a gift card or a small gift as a thank you.
Your customer referral program can have different levels of rewards. For example, 1 referral can equal one point. Using a point system, you can have a $10 gift card for 1-5 referrals, 5-10 referrals is a $50 gift card.
Scoring Your Customers
You want to always put your best customers first. There are going to be some customers who are active evangelists and refer business to you often. There will be more passive customers who are repeat customers, they just haven’t referred business to you.
What you want to do is separate your customers by placing them on a scale from 1-5. A customer at a five is a repeat customer and an evangelist for your company.
Someone at a three is a repeat customer and have been for a while. A customer ranked at 2 is someone who has bought from you at least twice, but they’re more recent. A one is a customer that bought from you once and then disappeared.
This scoring system is important because it tells you where you need to spend your time. You want to move your 2-3 customers up the scale to a 5 and make sure that you’re treating your 5 customers like the VIPs that they are.
How do you move customers up the scale? It all starts with creating excellent customer relations.
Customer Referral Program Ideas
Launching a fast and simple customer referral program is a great way to get into the habit of asking for referrals, showing appreciation, and having fun with your customers.
You shouldn’t do these more than twice a year. Your customers are smart, and they can sense a pattern. You don’t want to train your customers to hold onto referrals so they can enjoy a perk.
One of the best ways to jump-start referrals is through a referral contest. They give you an opportunity to be creative with ideas and giveaways.
A business can have a referral program over a one-month period. Each referral is a point. If someone enters more than 5 referrals, their points are doubled. They can use their points for small prizes like gift cards or they can enter into a drawing to win a prize.
The key is to make the prize something that’s consistent with your brand. A gym wouldn’t want to give away gift cards to fast-food restaurants, because that will go against their brand and service. Giving away a healthy cooking class would work.
You can also have a referral program around the holidays or any season. A restaurant can have a summer grilling contest, where people who give referrals can win an amazing grill or are treated to a barbecue dinner.
Any industry can implement a customer referral program. That’s the beauty of them. For example, take a look at this cleaning customer referral program.
Customer Referrals are the Bedrock of Your Business
It doesn’t matter what type of industry you’re in, you rely on customer referrals to bring your business. The most common issue that businesses face is that they don’t know how to ask for referrals. They don’t have a system in place to make it a repeatable process to get referrals over and over again.
Once you have a repeatable customer referral program in place, getting referrals is seamless. You ask, get referrals, thank customers, and serve them well. When you do that, your business will succeed.
Want to know more about creating loyal customers? Check out this article to learn how to provide great customer service all over the world.