Successful referral programs come in many forms. A business can build an entire new consumer base from employee referral programs alone. Add customer referral programs or even other business referral programs to the mix and you have a fine recipe for success that could result in growing your business beyond your wildest dreams.
Creating successful referral programs for a small business may require a few kinks be worked out, but these are learning and analytic experiences that should never be ignored. One unfortunate aspect of business referral programs is that it is rare to find the perfect one to meet your needs on your first shot. So once you launch your very first program, your main objective should be to observe, analyze, learn and perfect the program until it meets all of your needs without executing a fatal blow to your bottom line.
Two Main Referral System Types:
Keep in mind when fashioning your own successful referral programs that there are two major types of referral systems.
Pro-Active Referral Systems
This type of system is a bit different from a more passive system. While you should definitely provide a reward to a client just for sharing names of possible referrals to new customers, the reward should be attractive without being so valuable that you receive tons of unqualified referrals that can never be converted. Find a healthy option for your business that involves providing something created by your own team as a reward. Inexpensive incentives that you could purchase if your team doesn’t have the knowledge or capability to produce rewards can include desserts at nearby restaurants, movie rentals, free car washes and more. These are relatively inexpensive incentives and well worth the investment if they return a new happy consumer to your fold.
Passive Referral Systems
A passive referral system basically means that you are two steps removed from a prospective new customer. The focus is to provide such an incredible product or service that your consumers voluntarily tells their friends, associates and family members about your business, and in a manner that drives them straight to you with haste.
By adding the incentives to the mix, you can then increase the chances of that word-of-mouth referral following through to your business. Handing your current customers gift certificates that they can share with their friends is a great passive referral system. You may be two steps from a new consumer, but a current consumer is your advertisement. There can be no better.
However, the detriment is that because you are two steps removed from a prospective buyer, you are never in the position to actively and assertively promote your businesses products or services, or to answer any questions or concerns the prospective may have. For this reason, it can be important to always provide a source of contact, tag that gift certificate with a short URL that leads to a FAQ page or a contact form for those who are interested, but have concerns or questions that are important enough to them to research before buying.