There are a number of key elements to think about as you develop a customer referral program for your company. The way you reward people who provide referrals is one of the most important elements to consider. The incentive part of your referral program will have a major impact on the amount and types of referrals you receive. In order to get the results you want from your customer referral program you need to reward your referral sources quickly, consistently, and generously.
One way to get multiple referrals from one customer is to reward them quickly when they provide a qualified lead. It is the way you prove that you will deliver on the promised reward. It also reassures customers that it is worth their time to go through the referral process. Finally, rewarding referral sources quickly will add legitimacy to your customer referral program which can in turn increase the number of people who are willing to provide referrals.
Customers are 115% more likely to recommend a company to their friends when that company is easy to deal with. If you want referrals, you need to make every step of the process simple for your referral sources. That includes making it easy for them to collect their rewards for providing you with leads. When there is a simple and consistent way to collect their rewards for providing referrals your customers will be much more likely to provide more referrals.
What does a new customer mean financially for your business? You can calculate the customer lifetime value in order to determine the profit your business can make from an average customer. How much does it cost to acquire a new customer? Using traditional marketing techniques can become very expensive to acquire new customers. Understanding the lifetime value of a customer and the costs associated with acquiring that customer can help you determine how much of a reward to offer to your referral sources. When you truly understand these two numbers you will understand the importance of rewarding your referral sources generously. A single referral that turns into a customer can provide you with ongoing value-especially if they provide you with future referrals. And, getting a referral from one of your customers saves you on the typical marketing costs that you would incur to acquire a new customer. By offering generous incentives for referrals you increase the likelihood that your customers will make the effort to provide you with those referrals.
Customer referrals are some of the highest quality leads that you can receive. This is largely because people trust the recommendations of their family and friends over other types of marketing. In order to acquire these valuable leads you need to develop a customer referral program with a strong incentive program. When you reward your referral sources quickly, consistently, and generously you will significantly increase the likelihood that they will continue to provide you with qualified leads.