Referral programs are a very good way to popularize your brand and increase your sales. A good referral program works in the following manner – you reward the people who send you new business. This will encourage them to send you more business. It is as easy as 1-2-3. Why are these programs successful? Let me explain.
People, by nature, love to get rewarded for their actions. If there is an incentive, it motivates them to take action. So, naturally, when they get rewarded for sending new business to you, they feel appreciated and happy. Your response rate will increase tremendously.
The advantages of a customer referral program include:
1. It costs very little. Your friends and clients bring you new business – all you need to do is reward them by giving them something in return.
2.It encourages highly valuable customers. A customer who is referred to you by an existing client is more likely to do a lot of business with you, as they know you are trustworthy and dependable.
3.Over time, it builds brand awareness. When large numbers of people talk very highly about your business, it has an exponential effect and your brand’s popularity explodes.
4. It creates a channel to launch your new products and services. This is most likely the biggest advantage of a referral program.
5. It creates a platform to maintain the excellent relationship you have with your existing clients and to build rapport with new clients.
To get great results, you should inform your existing clients about your referral programs. You can do this by making a phone call, text message or by sending an email to all your clients. You may gradually build a mailing list and send a short message to your inactive clients now and again. In effect, you keep reminding them that you appreciate them and would like to reward them for what they do well.
You should understand an important thing about a customer referral program if you own a business. The incentive you give need not be too extravagant. Most of the time, service credits would be just fine. A box of chocolates will show your appreciation for your customers, or even a donation to a local charity in the name of your customer will go a long way.
What matters at the end of the day, is your intention. So, do not worry about spending too much money on a new incentive program. Set up a referral marketing program today and get the results you want.