If you need a boost in your lead generation, word of mouth is still one of the best marketing strategies you can use. In fact, 87% of B2B referral marketing brings in the best leads over other avenues. But how do you get people to talk about your business?
One way is by creating a referral program.
What is a Referral Program?
A referral program is a marketing tactic that encourages loyal customers to recommend your business or brand.
It works by offering rewards or incentives to existing customers for every new customer they bring in. That way, people who have worked with you and know the business can advise others who don’t. Then, you get new leads while they get another point towards the reward.
The rewards are often monetary, but that doesn’t mean it has to break the bank. It can be a discount on their next service, a free consultation call, a gift card for a coffee at their favorite shop, a free ebook, some merch, etc.
Benefits of a Referral Program
As mentioned above, word of mouth is the largest marketing strategy used today, and a referral program is the perfect way to get people interested in your business. But before I go any further I want to stress that if you’re building a referral program make sure you are partnering with people that have actually experienced your services before.
A referral program can also create warm leads through trust. According to the Word of Mouth Marketing Association, 92% of consumers trusted the referral of a friend or family member (someone they trust) over online ads or reviews.
Think of it this way: if your clients are happy, they’ll tell a friend about your business. That friend then has the potential to become a warm lead– which is much easier to convert than a cold lead. Plus, when you offer rewards for bringing in new clients, you encourage your current clients to stay longer than they might have originally.
Finally, a referral program can lower client acquisition costs because it doesn’t need much marketing. All you have to market is the program itself and add it to your customer journey with clients. The rest should build on itself over time, creating an efficient and self-sustaining marketing strategy.
How to Build a Referral Program
There are seven steps to building a solid referral program. They are:
- Set goals
- List potential referral partners
- Figure out the rewards
- Make a plan to reach out
- Track your data
- Send thank yous
- Improve the program
Step 1: Set goals
The first step is to define and set your goals. What do you want this referral program to accomplish? Are you looking to increase revenue, customer retention, business growth, or something else? How many partners do you want to have? What is the reward for your partners, and how many referrals until they get it?
Be as specific and detailed as possible when creating your goal. Then, once they’re laid out, the rest of the steps will be a breeze.
Step 2: List potential referral partners
To figure out who to tap for the first round of referrals, grab a sheet of paper (or an empty document on the computer) and begin listing everyone you’ve worked with.
Include current and past customers, other businesses you’ve worked with, leaders in your industry who know your work, and even friends and family.
Step 3: Figure out the rewards
Thanks to the internet, hosting a referral program is easier than ever. If the reward is a gift card or other monetary prize, you can credit it through PayPal, Thrive Card, Venmo, Cash App, or other online payment systems.
If the prize is a discounted or free service, you can create professional coupons (or coupon codes) and email them to the winners. Or, if the reward is a free ebook or resource, send them the PDF or an unlocked download link. Easy!
Step 4: Make a plan to reach out
Asking people to be your advocates can be nerve-wracking, so it’s good to make a plan ahead of time. Do you want to follow a script, or have a friendly conversation? Will you ask them over the phone, on a video call, or in person?
Once you’ve got a plan in place, go ahead and schedule the calls, make the appointments, and plan to meet with your chosen partners. Don’t be afraid to ask them, either. The worst they can do is refuse, and then you thank them and move on to the next person on your list.
Step 5: Track your data
A referral program is useless without tracking data, so make sure you have a way to monitor the number of referrals and who brought them to you. You also need to track other data, such as your ROI for the program, how many new referrals are staying, etc.
Tracking data like this helps you spot your top advocates, identify weak points, monitor your budget, and keep everything running smoothly, so don’t skip it.
Step 6: Send thank yous
Whenever a referral makes a sale or books an appointment, send a thank you to your referral partner. They want to know that their effort is appreciated, and your recognition will get them excited to continue recommending you.
Step 7: Improve your referral program
After the program’s been running for six months, send your referral partners and any new clients booked through referrals a survey about the program. Ask them what they like, what they’d improve, and if they have any comments or concerns about the program.
Do this every few months and use their responses to polish your referral program until it shines.
Final Thoughts
Referral programs are great ways to gather warm leads, build trust with existing clients, and get that coveted word-of-mouth advertising.
If you don’t have a referral program already, or if the one you do have isn’t generating leads as it should, use the tips above to create one that will boost your lead generation like never before.
