Lucas Weaver
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Lucas Weaver

Marketing Strategist at Weaver Communication
Lucas Weaver is the founder of Weaver Communication and author of Explaining Digital Marketing.
Lucas Weaver
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How to Build Effective Referral Program from Weaver Communications

Building a great and effective referral program can not only generate your business more customers, but more importantly it can generate the right customers. Here are 5 steps to creating an effective referral program.

Step 1. Creating an Offer

You need an offer that is enticing to potential and current customers, but it also needs to be an offer that doesn’t break your bottom line. Choose a service offering that you have a healthy profit margin on so that you can afford to discount it by a meaningful amount. You also need to make sure there is a high demand for the offer, this will lead to a much more successful referral program than if you were to offer a service that no one cares about. Think about Oil Changes for Mechanics vs. Wiper Fluid changes. Oil changes will always drive more new customers your way than Wiper Fluid.

Step 2. Promote the Offer

Keep this simple but effective. Place a pile of flyers on your front desk with the offer details explained. If you’re offering a Free Teeth-Whitening service, make sure your current patient knows that they will get a free teeth whitening session, as well as the person they refer. This works in multiple ways, the first being that your current patient/customer doesn’t feel that they are being taken for granted in favor of a new patient. The second is that your current patient has a powerful incentive to  make sure the referral happens. By giving incentive to both parties you have double the likelihood that the referral will come through. The third aspect is that once your new patient referral has come into your office and had their free teeth whitening, they now have something in common with the person who referred them. They can now choose to have the same dentist as their friend whom they presumably like, or to back to what they had before. Assuming you are friendly and customer service oriented to the new patient, they will hopefully choose to schedule a teeth cleaning that they are most likely over-due for, and become a long-term patient of yours.

A. Flyers: contain the details of the offer, your phone number, website, logo, and location.

B. Social Media, contain the meat of the offer and link to the details with all of the info above on your website.

C. Email, send the details of your new referral program to all of your current customers, they will appreciate you giving them the opportunity to save and provide value to their friends.

Referral Programs for Small Businesses

Google Trends Comparing Oil Changes to Wiper Fluid

3. Capitalizing on the Offer

As mentioned before, you want to make sure to wow your new referral with your service one they’re in the door. Now the trick is to present them with a chance to become a regular customer without being pushy. Sticking with the dentist scenario, you can send home a tooth-past clamp that helps the patient squeeze every bit of paste out of their tube, and have your practice name, number, and website printed on the clamp. You could also use a refrigerator magnet or  a calendar, anything to keep your name on their mind when they think of your business vertical. It’s best to schedule something on the books for the future, but if you don’t, at least get their email address and send them home with something to remember you by.

4. Thanking Your Referrer

Always remember to thank your current customer that referred a new customer to you. They will appreciate this thoughtfulness and thusly be more likely to refer someone again. You might also get lucky and cause them to strike up a conversation with the customer they referred to see how things went, further cementing your business in the new referral’s mind.

5. Track the Results

Now it’s time to sit back and count up your profits. You should be inputting each new customer into your database with a label or note that they came in from this referral program. Figure up how much profit you made from the program and calculate the ROI. You can adjust from as to whether you need to come up with a better offer, offer less of a discount, or just keep oiling the referral machine!

Check out these helpful articles from Duct Tape Marketing and SalesForce:

How to Boost Your Customer Referrals in 7 Simple Steps

4 Types of Referral Programs Every Business Needs

5 Tips for a Successful Customer Referral Program