Ask many business owners and marketing professionals where new customers and prospects come from, and they just might answer from “referrals”—but getting referrals from existing customers may sound like simple tactic, the actuality can be quite different. So, what can you do to generate referrals and encourage your customers to spread the word? Some businesses turn to creating some sort of reward system to reward customers and clients who make referrals.
Surely you’ve heard things like “Be sure to tell them I sent you!” or “$5 off if you send a friend.” Businesses use coupons, discounts, and rewards to encourage existing customers to bring their friends and family members into the fold. This can be an extremely useful and successful way to generate more referrals and grow your business.
In order for a referral incentive and reward program to work, you have to make sure that you let customers know about it. This means that you need to come up with a program and then include it in your marketing materials, web site, shipping info, or special mailings. You can offer a discount, coupon, some sort of “cash back” or a special add-on incentive. Whatever it is, it should be something of value to the customer and interesting enough to tip the scales and cause them to spread the word and bring a friend to your business. You might choose to offer a referral reward that is good for a “one time only” or one that is on-going (a small discount for every month or quarter that one of their referred customers continues to make purchases). Regardless, consistency and appreciation are key to making a referral reward program work.
Once you get the referrals, be sure you treat them well—the fastest way to use word-of-mouth both positively and negatively is by tapping into social and family spheres of influence. If you treat everyone well then the word will spread fast that you are a reputable business to work with. Treat one person poorly, and it seems the news will spread twice as fast!
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