It’s often been said that the best kind of advertising is free. Referral marketing doesn’t need to cost a business owner anything. Asking a satisfied customer for names of prospects seems simple and inexpensive enough. To make a word-of-mouth campaign really hum – and show customers that you appreciate their efforts – consider a referral rewards program. These rewards can take different forms, both financial and non-financial. Regardless of which method you choose, the key takeaway revolves around the strategies that give you the best results.
Discounts and Coupons
One of the more successful rewards programs you can offer customers builds upon product discounts and coupons. If you own a retail shop, offer savings on future purchases in exchange for a set number of referrals to keep new customers coming through the doors. You are establishing two goals for the business: a solid way to boost revenues and building further loyalty from an existing customer base. While these metrics are vital, tracking return on investment or the revenues generated from revenues sacrificed is equally important to this plan.
Run a contest to see how many of your clients can generate a certain number of referrals in a designated time frame. Pull a winner from a pool of customers who meet the criteria. As a reward, publicize the victor on your website and at your business. Try putting up a gift card to an associated local business. This strategy also offers a double-edged advantage: It builds customer relationships and forges alliances with local business peers, who will appreciate the patronage and perhaps send you some referrals of their own.
Customer Appreciation Events
One proven and more expensive way to gain referrals is to run customer appreciation luncheons or social events. You may want to focus on the top 20 percent of your clientele to minimize your cost and maximize the potential return. Invite customers with one stipulation: They must bring a friend or family member who is not an existing customer at your business. Events like these allow customers to relax and see another side of you and your business. Don’t lose sight of the opportunities at hand; there are people in the room who you need to draw into the fold. The dollars you pull in must exceed the considerable dollars you’ve put out to run the event.
Free stuff and money-saving opportunities are wonderful, but those offers sometimes pale in comparison to your heartfelt thanks. Your reliable sources of referrals enjoy the rewards, but they also likely enjoy the whole customer experience you’ve created. Let them know how grateful you are, both for their patronage and their participation. Sincerity goes a long way toward maintaining solid client relationships and those associations are valuable and difficult to replace. You won’t need replacements or pricey advertising campaigns if you let your gratitude shine through.