Getting existing clients to send new clients to you is a great (but tricky) way to grow your business. The problem isn’t credibility; after all, most people will take the word of a friend over traditional marketing methods. The issue is getting them to make a referral in the first place.
You could offer the most attractive bonus in the world, but most people are too busy with their own lives to market your business, regardless of the payback. And some feel uncomfortable receiving an incentive for referrals.
But a rewards system? That’s a whole different game.
You’re simply saying “thank you.”
People generally don’t want to be compromised or feel they are joining a program—but they love to be acknowledged. Send a thank-you note each time they give you a referral, and you will find that what gets rewarded gets repeated.
When customers purchase from you, ask what or who prompted them to shop with you that day.
Some customers will come from your advertising and marketing efforts, but others will shop with you for the first time because a good customer has recommended your store.
Send the referrer a thank-you letter—their details should be in your database—along with a reward to spend either with you or elsewhere.
Of course they will tell other people about the reward (more referrals for you) and how wonderful you are (more referrals for you, more vouchers for them); and if you gave them a voucher, they will probably spend more than the voucher is worth (more sales for you).
Encourage employees to get into the referral/reward habit.
Challenge them to a little game based on who can collect the most referrers’ names each month.
Rewards yield more rewards.
If you send your customers a voucher each time they send you a customer, they will tell more people how good you are and get more rewards. Why do you think the dolphins at SeaWorld get a fish for each trick? Humans are not so different!
A version of this story originally appeared in the November 2013 issue of JCK magazine.