Creating a Referral Program for Your Small Business
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Do you want to leverage your existing customer base to expand your small business? Do you want not only your clientele but your employees to help bring in revenue? Do you want to create a referral program that works for you?
By creating an easy-to-understand referral program, you are inviting your customers and employees to share their experience with your services with those they know, while reaping the benefits. A referral program can also create a healthy environment where your customers and employees feel appreciated.
Assess Your Current Clientele
Who are your clients? How did you obtain their business? Is there a specific demographic associated with the majority of your clientele? What types of jobs and hobbies do your clients have?
One of the best parts of owning a small business is the personal touch your services provide. You get a chance to get to know your customers, and when you chat with them, listen. Listen to why they have come to you. Listen to what situations they have found themselves in. Listen to the stories they tell about family and friends. Every bit of information gathered can help you figure out who you have access to based on your customer's communities.
Plan Your Course of Action
Before choosing a referral program, you need to ask yourself the following questions:
- How much money can I invest in a referral program?
- Do I plan on having assets created to advertise the referral program?
- Do I need to invest in a websitesocial media campaign?
- Do I need to hire someone to help with this process?
- How do I plan on communicating the referral program to my clients?
- How do I plan on communicating the referral program to my customers?
- What type of message do I want to send by providing a referral program?
- How does the referral program align with my small business's needs and goals?
- How long will I offer the referral program?
- Will there be more than one referral program? Will the program be a hybrid?
- Do I have any brand ambassadors or "cheerleaders" that I can leverage to get this program off the ground?
- What is my plan if the referral program is not successful?
Once you have a clear view of your financial and social situation, you can move forward with a referral program that works best for your small business.
Pick a Referral Program
Now it's time to pick a program that works best for you. The best part? You can mix and match to your liking! You can choose your percentages or cash-back values. This is your small business's referral program, so take time to build what makes sense.
Be extremely clear with the terms of whatever program(s/) you choose. If timeframes apply (for example, if you're an accounting firm, you may not necessarily implement a referral program deep into the tax season, but may consider offering it "off-season"/), make it very clear.
Here are the top six referral programs that have proven time and time again to bring more customers to small businesses:
Credits or Points
For every referral, an existing customer or employee sends your way, gives them credit or points toward their next service. You will find this will be more successful with customers, as opposed to your current employees - but that's okay! Who doesn't love to earn credit toward a gift when spending money on the services they were going to buy anyway?
The exciting part about this model is how much it can grow. If you put a decent credit or point system on a referral program, you may find that those who were referred are now making more and more referrals to claim the points - and that's fantastic!
Have you ever logged into a website and the banner appears saying a donation will be made to a charity for every person who joins their mailing list? While checking out at the grocery store, have you been asked to donate a dollar or two to a local charity?
You may be saying, how does this put extra money into my business's pocket? The answer: people want to work with those who care and contribute. If you show your take an interest in a certain charity or cause, and people around town hear, they may consider coming to you because of the shared interest.
Never question the power of giving, the good it can do, and the connection it came make between your small business and the local community.
Leverage the power of the dollar. It can be as easy as, for every referral sent in, after their first service, the existing customers get $10 (or any dollar value that makes sense for your small business/).
Every consumer loves a dollar value, but you will find this program can be extremely successful with your employees if structured correctly. Depending on the type of services your business provides, you may want to consider a quarterly bonus to each employee based on the number of referrals they bring to you. It is important to set guidelines around how many, how often, and what constitutes a referral. And this makes your employees feel valued! When you appreciate and recognize all of the hard work your employees do, they will work harder and smarter for you.
Share the Benefits
How this works is if your customers refer to a friend, the customer and the referral both benefit. Typically, the person making the referral doesn't receive the benefit until after the referral's first purchase.
For example, if you provide cleaning services, your program's terms could say that if a customer refers a friend, the friend will get 25% off their first cleaning and the existing customer will get 25% off their next cleaning (once the friend has had their first cleaning/).
Want to take it to the next level? Provide a free service for every referral a current client brings in. This type of referral service can only be taken into consideration if you can float the up-front cost of providing a free service to an existing client. Yes, you will be bringing in money beforehand with the referral's first purchase, but the profits of that may not equate to providing a free service to an existing customer.
Check your budget, overhead, and service costs a couple of extra times if you're going to take this route. But with big risk comes big reward!
Raffle or Drawing
Drawing can be fun and can draw excitement toward your business. Raffle off a television, a month of services, a free handbag, anything. Enjoy the interactions you have during this time and learn from the people patronizing your business.
Remember, drawings should be conducted separately for employees and customers; you do not want your customers sending referrals your way to find out an employee won a drawing - it could cause a lot of distrust.
Communicate and Bring in the Referral Program
The best referral programs are the ones that everyone knows about. Make sure to educate your staff on the program (especially those who collect money from clients/) and make sure the terms are easily accessible/visible for reference. Share the programs on social media, on your website, and throughout the community through business cards, flyers, and interactions. Finally, leverage the word of mouth from your employees and customers and incentivize them to help bring in the business.
Looking to Expand Your Small Business?
If you think you're ready to expand your small business, you may need financing. First Union Lending is here to help.
We have nine different business loan types to choose from. This means that we're uniquely qualified to help you find the perfect business loan to open your small business.
Applying for a business loan doesn't affect your credit. Better yet, your business loan may be approved as soon as the same day.
To discuss our business loans with one of our lending experts, click here or call 863-825-5626. We'll talk about our various business loans and help you find the right one to open your pain clinic.
Get started with the process now by learning more about our business loan types here.