A referral program is basically a type of word-of-mouth publicity where you encourage your satisfied customers to vouch for you and bring in more customers who could be their friends, neighbors, family, colleagues, etc. These customers become your brand advocates and generate more leads for you. In lieu, you offer them discounts, freebies, store credits, etc. so they feel motivated. 

Referral programs have a higher conversion rate than other forms of marketing and mainstream advertising because the references are given by people who have already tried your business and are satisfied with it. 

Here is how you can design an effective referral program for your small business: 

• You would need software to automate your referral programs. You can’t do it manually using spreadsheets. You have to make the process fast and hassle-free for your clients as well as for your team. Clients should have access to the rewards they have received and the details on how they can avail them. A software can keep records of thousands of customers as well as make it easier for them to get the details any time they want. 

• Once you have chosen a software, it’s time to design your referral program. Decide who you want to reward and how. Do you want to reward only the existing client who has brought a new one or do you want to reward both of them? What kind of reward would you want to give so it lures clients to engage in the referral program but doesn’t cost you much? Ideally, it should be lower than or equal to the average cost of customer acquisition.  
• Market your referral program through your website, messages, emails, posters in your store, social media posts, etc. Remind your customers about it on almost every visit so it stays in their minds. 
• Once a referred prospect gets converted, send a thank you note to the client who referred him. Also, reward him/her immediately. Fulfill your promise. Do not provide substandard freebies or low-quality services as rewards. Make sure the rewards are lucrative enough so they continue being a part of your program. 

Make sure you keep people’s privacy in mind while seeking references. Do not do anything that could be considered as a breach of privacy or else you may invite a lawsuit. 

More information: https://www.significantgps.com
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Franne McNeal: https://www.linkedin.com/in/frannemcneal