Since the first business owner opened the first store, they’ve gained new customers through word-of-mouth recommendations. Referrals are a bit different from back in the days when there were one general store and a saloon in town, but the underlying reasons people trust others’ referrals remain the same.

Past studies show people referred to a company by someone they know are 15% less likely to churn and spend 25% more money. You’ve probably noticed social media posts where people need a product or service, and they first turn to family and friends for recommendations. If you’ve given your current customers incentive to share your information, you may get more referrals than your competitors.

You may have overlooked a formal referral program as part of your marketing strategy. Or, you might think your customers will automatically tell others if they’re satisfied with your products and services. You may be severely underestimating how well word-of-mouth marketing works for your type of business. Here are 10 ways to ramp up your referral efforts and grow your business.

1. Leverage Happy Customers

You’ve worked hard to make sure you have the best customer service around. You know your unique value proposition (UVP) and what you offer no one else in the industry provides. Because of your diligence, your customers love you. While that’s great for keeping the clients you have, to grow, you’ll need to get them talking.

Start by reaching out to your most loyal fans. Check your databases for customers who order from you over and over. Reach out to them and ask if they’d be willing to share what you do with their family and friends. Offer a discount, gift, or some other perk for doing so. Consider your happiest customers like a street team, talking you up to everyone they meet.

2. Encourage Referrals

People don’t naturally walk around thinking about who they can tell about your business. That isn’t really their job. However, if you give them some motivation to refer new customers, they’re much more likely to do so. Give them a cashback offer, monetary discount on future orders, or a gift card.

RoofClaim - Refer Your Friends, Earn Cash
RoofClaim – Refer Your Friends, Earn Cash

RoofClaim places a prominent call to action above the fold on their landing page. They share that you can receive a $150 Visa gift card if you register and submit the referral through their system. The offer helps the company always have qualified leads and the ability to name drop who already used their services and wants to recommend them.

3. Draw Attention to Your Referral Program

Your website and social media pages are the perfect starting points for getting people interested in your referral program. A bold and eye-catching call to action (CTA) advertises the program and entices your users to click on a link to learn more or sign up. Let them know what type of rewards they might start earning by joining an affiliate program.

4. Gain Testimonials

A referral program gives you a core group of people who believe in your product enough to share it with others. Talk to those who sign up and see if they’ll share a testimonial. Adding testimonials to your website gives you another layer of trust for those who may not have heard of your brand before.

When someone first lands on your website, they have no reason to trust you. While your referral program may drive some traffic, you’ll also gain traffic from social media, search engines, and backlinks. Make sure you add elements to show random leads you are reliable. Testimonials are an excellent place to start.

BambooHR
BambooHR

BambooHR offers a referral program where clients earn an ongoing commission for referring new people to the program. They also utilize some of their top customers and share video testimonials of how their company helped the person’s business.

5. Grow Your Business

The right type of referral program makes companies grow. Knowing what incentive to offer isn’t easy, though. Start by researching your competitors. What do their referral programs look like, and do they seem successful?

Next, take a look at large corporations and their affiliate models. Just because a brand isn’t in the same industry doesn’t mean you can’t gain valuable inspiration from their successes.

Poll your current customers and find out what would give them the motivation to tell others about you. You may stumble across some ideas you wouldn’t have thought of on your own. The most crucial detail is offering something both the person referring and the potential lead find desirable.

6. Keep Current Customers

One thing you can do is tie your referral program to your product or service. Instead of handing out $100, offer a credit on the person’s bill or in-store bucks they can use for a future purchase. Customers who have money stocked up from referring others aren’t likely to shop anywhere else, so you retain the clients you already have.

Customer churn is a serious issue for some businesses. In addition to offering a referral program keeping them tied to your brand, make sure you’re offering them special incentives no one else gets and giving them positive personal attention. Your business won’t grow if you lose customers as fast as you gain them. Studies show that those who have already bought from you are more likely to spend more on a purchase than new faces.

Koodo
Koodo

Koodo offers referral bucks whenever one of their customers refers to someone else. They apply the amount to the person’s bill, saving them money all year long, but also keeping them tied into the brand. The more people they refer, the more they’ll save.

7. Advertise in a New Way

A referral program gives you something new to the market to consumers. You can point out the rewards you give to your loyal clients and how it benefits them to sign up for your affiliate program when they become a customer.

Figuring out new ways to reach people is challenging. Ads saturate social media and search engines. However, if you can give your marketing a unique spin and grab user attention, they’re much more likely to respond. Pointing out the benefits of a referral program is a powerful way to connect with others.

Pointing out the benefits of a referral program is a powerful way to connect with others.Click To Tweet

8. Attract New Clients

Those who want to try your service, but might not be able to afford it, can look to your referral program to earn the money to make your product more accessible. Depending on your referral rewards regulations, they may be able to completely pay for the service by referring to others. As long as you’re gaining new clients, having a few who get free accounts thanks to the numerous paying people they bring in is beneficial to you.

MailChimp
MailChimp

Mailchimp offers a referral program where users earn bill credits. If you’re on a paid plan and would like to upgrade and gain access to more features, themes, and other perks, you can refer others and pay for a big chunk of your costs. Telling others about the service only costs you a little time but benefits you greatly, especially if you’re a small business on a tight email marketing budget.

9. Create Inexpensive Lead Generation

A referral program is one of the most cost-effective ways of generating new leads. You aren’t paying for clicks that fizzle out before they convert. You don’t have to secure ads that go nowhere. You only pay the referrer when the person buys from you.

For small businesses or startups on a shoestring budget, having cash in hand before paying out helps you scale your business more quickly. If you offer a discount on your service in exchange for referrals, you save even more.

A referral program is one of the most cost-effective ways of generating new leadsClick To Tweet

10. Secure Invested Customers

Those who refer family and friends are likely to connect with them and see how they like the service. The communication from the referrer adds a level of personalization to your business without you lifting a finger. They can help the person learn how the system works, understand the order, and a hundred other little details of your product.

If someone referred them, they’re more likely to give you a fair chance and stick around. While they will be more invested, don’t take it as a reason to not reach out as well. Give everyone the same level of customer service that made you a brand the person felt comfortable recommending in the first place.

Should You Add a Referral Program?

You don’t have anything to lose by adding a referral program to your business model. You’ll gain many advantages and few disadvantages. Think through how you’d like to organize it and keep track of referrals. Once you have ideas in place for the best method, it’s just a matter of letting your current customers know about the offer. Then sit back and watch the new leads pour in.

Your website and social media pages are the perfect starting points for getting people interested in your referral program. A bold and eye-catching call to action (CTA) advertises the program and entices your users to click on a link to learn more or sign up. Let them know what type of rewards they might start earning by joining an affiliate program.

Why Your Business Shouldn\'t Underestimate the Power of a Referral Program