Today, referrals are one of the most effective ways to drive new business your way. No matter how strong your marketing and sales programs may be, if you don’t have a strong referral program in place, you won’t see much positive impact. That’s because only about 10% of businesses succeed with marketing and sales efforts alone—especially when it comes to getting those first few customers (read more here). That said, there are so many ways that a strong referral program can help you boost your business—and not just through word-of-mouth promotion. With the right strategies, a solid referral program can also lead to increased productivity, increased engagement within your organization, and even higher financial performance.
What Does a Strong Referral Program Look Like?
An effective referral program starts with a strong network of pre-existing relationships. These networks can be built through social media, connections with other businesses, event networking, or other channels. Next, your team will need to identify ways to leverage those relationships. That’s because, in order for a referral program to be effective, you’ll likely need to adapt your strategies to account for individual preferences. For example, some people value recognition more than cash rewards—so strategies that highlight a colleague’s name in a printed referral materials may not be effective. On the other hand, a computer-generated referral program might soon feel impersonal, so it’s worth experimenting with different strategies until you find one that generates engagement.
Be Specific with Your Strategies
If you’re offering both cash and non-cash rewards, be sure to convey specific guidelines for redeeming them. Otherwise, a reward that feels meaningful to one employee may fall flat on another’s desk. You should also be as specific as possible when describing the value of each reward. If you say “a gift card for your favorite restaurant,” it’s best to also clarify that it’s for $100. Otherwise, your employee may think they’ve got $100 cash in their pocket—when, in fact, you’re hoping they’ll use it to dine out with coworkers. To avoid confusion, you may also want to test different phrasing—for example, “a gift card for your favorite restaurant” versus “a gift card worth $100 for your favorite restaurant.”
Use Data to Improve Your Strategies
If your program is limited to word-of-mouth referrals, then you’ll likely struggle to gain traction in the long term. That’s why you should consider tracking both the success rates of your individual referral channels and the overall rates of your organization as a whole. Using this data, you can identify any channels that are underperforming. For example, if you’re only receiving 10% of employees’ referrals but 90% of those referrals are bringing new customers to the business, it may be that your internal referral program needs some tweaking.
Build a Culture of Word-ofENDary
One of the best ways to improve your referral program is by building a culture of word-of-mouth. That means encouraging employees to both thank their referral partners and offer constructive feedback about their experience with your business. For example, you might want to include a section on your employee handbook that says: “When you’re at work, you may find it helpful to remember that you’re representing your employer. If your partner is having a good experience, it’s probably worth mentioning.” This advice can be especially helpful for those who are experiencing pushback from management. If your employees are finding themselves having to defend their referral partners’ choices, you may want to consider addressing this head-on.
Stay Committed to your Strategy
Make it a priority to maintain your existing relationships. When you do so, your existing partners will likely have the opportunity to refer others—and, in turn, those referrals could lead to new clients. As long as you’re consistently providing value, your partners will be more likely to remain loyal to your business. This strategy relies on the fact that a strong referral program relies on relationships. When those relationships are built on mutual trust, loyalty, and value, they can become incredibly strong.
Help People Know When it’s Time to Jump in Conclusion
If your existing partners start asking for new referrals, remind your team that it’s time to start jumping in. If you want your partners to jump in, you need to make it easy for them to do so. That means providing easy-to-understand information about your program, including how to properly refer your clients, and how to properly redeem their rewards. If you want your partners to jump in, you need to make it easy for them to do so. The above will get you started—but it won’t fully optimize your program. An effective referral program will require you to shift your mindset and alter your workflow. You’ll need to change the way you train employees, the way you do business, and the way you manage your finances.
Conclusion
Finding new clients is important, but it’s not enough. You also need to keep your current customers happy—and do so in a way that’s sustainable. A referral program is a great way to do just that. It gives your satisfied customers the opportunity to share their experiences with others—and, in turn, those others may become new customers themselves.