Welcome to ReferralHero, an oasis of marketing potential. Drink deeply of the referrals and refresh yourself from wandering through the deepest deserts. You’re safe here.
If you’re a small business, you’ve likely tried A LOT of different marketing techniques.
I know when I was starting out, it felt like I was throwing ideas at the wall and hoping something stuck.
What I know now is that a well-planned referral program would have given my business just the boost it needed!
Referral programs are a win-win, especially for small businesses. They bring in new customers while building up loyalty to your brand.
But not all referral programs are equal. There are specific needs that your business has, and if you follow my tips and tricks, you’ll be able to build a system that meets each and every one of them!
What Is a Referral Program?
When people decide what businesses to engage with, it’s a bit like scrolling through a streaming service and deciding what to watch.
As we all know, this can take EONS, and there’s often not much pulling us toward one or the other.
However, if a friend tells you that a new movie is the tops, you’re far more likely to forgo the scroll and start watching it.
Now imagine if every five times you suggested a show, and someone acted on that suggestion, the streaming service gave you a free month of subscription. You would be far more likely to extend those suggestions, ultimately leading to more people watching.
This is an extremely simplified explanation of a referral program.
In the marketing world, this is an opportunity to reward customers for bringing in more business.
You can offer them anything from discounts to free products or services - whatever gets your customer base excited and works within your budget.
It can look like a lot of different things, but the goal is to turn customers into ambassadors by incentivizing them with rewards for referring friends and family.
How Can a Referral Program Help a Small Business?
For small businesses, these word-of-mouth campaigns can be even more successful.
You’ve already created a culture around your company, and chances are there is an aura of loyalty from your customers.
Mobilizing that community will strengthen the bonds while making them active participants in building your business.
New customers that find you through a recommendation will actually be more loyal and buy more over their lifetime!
Another bonus of a program like this is that it will keep your existing customers coming back. They know that each time they bring another friend, they will get rewarded.
The feeling of being a part of the team is super powerful to keep them engaged and makes everyone excited to see your business grow.
This strategy also lets small businesses get more bang for their marketing buck. Mobilizing your customers and offering rewards is a powerful tool that requires less monetary investment than other forms of promotion.
How to Set Up A Referral Program for Your Small Business
Now you see how great this kind of advertising can be, let’s look at jumping in!
Setting up a referral program for your small business can be relatively straightforward.
Step One: Choose Your Incentive
There are lots of different ways you can reward people for spreading the good word of your products or services.
You need to think about your current customer base and decide what is going to get them most excited.
Will they appreciate gifts? Discounts? Experiences?
Make sure the offer is something memorable and enticing.
You’ll also want to consider any hidden costs. You shouldn’t be gifting more than a new lead brings in.
Step Two: Create Your Referral System
If your referral system is too complicated, chances are your customers won’t bother with it.
Before you launch, you’ll need to know when you reward people, how you track where referrals are coming from, and the specifics of every step.
You don’t want to give people too many discounts or rewards so that the return on your investment shrinks, but you also don’t want the reward to feel unrelated to the referral.
Step Three: Promote Your Program
No one can engage with a program they know nothing about.
Consider promoting your referral opportunities on social media, in emails, by word-of-mouth, and with flyers or posters.
Ensure it’s super clear what your customers can gain, as well as what they need to do to get it.
Step Four: Track Your Success
The last thing you want is to lose track of who’s bringing in referrals.
Keeping a record of how the program is going allows you to identify any issues as well as know when rewards need to be sent out.
However, tracking this can get overwhelming, especially when you’re running a small business that often requires you to wear many hats.
That’s where software for tracking referrals becomes so important. Automating the process can eliminate human error while freeing up time for you to focus on other aspects of your business.
Examples of Small Business Referral Programs
One of the best ways to craft your referral program is to look at the successes of those that came before. Here are a few of my favorite referral programs that have helped small businesses soar.
Dave’s Cooling & Heating
A small HVAC business in Frederick, MD, Dave’s Cooling & Heating focuses on the community it serves while offering a way for customers to help.
Why It Works
By offering a reward to both existing and new customers, Dave’s allows the act of referring to be a gift for both the business and the friend.
They also keep everything as simple as possible so that everyone can take advantage of their program right away.
No Place Like Home Pet Sitting
No Place Like Home is based in Lithia, FL, and takes care of pets while their owners are away.
Why It Works
By offering a percentage of their friend’s invoice, No Place Like Home ensures their customers are referring high-value people.
They also have easy ways to share the program with an instant Facebook share button.
Spa Bar
Based in Orlando, FL, Spa Bar lets customers receive spa-based services and has a fresh, engaging design for its referral program.
Why It Works
With strong copy and branding images, Spa Bar makes sure their customers are immediately drawn into their program.
Rewarding both customers and keeping everything easy to understand makes for a simple win-win proposition.
Small Business Referral Program Best Practices
There are always inside tips you learn from setting up a referral program, and I can pass some of them along to get you started on the right foot.
Tip One: Keep It Simple
Make sure that customers understand how the referral program works and what they need to do in order to take advantage of it.
The more steps they need to follow, the less likely they are to engage with it.
Tip Two: Promote, Promote, Promote
Regularly promote your referral program on social media and other channels so that customers know about it.
The more someone sees something, the more likely they are to remember it when they see their friends.
Tip Three: Track Everything
Set up a system to track referrals so that you know how successful your program is. This will help you adjust it as needed over time. It also makes sure no referrals fall through the cracks!
Tip Four: Follow Up
Make sure to connect with customers who have referred others, and thank them for their efforts. This is an opportunity for you to get feedback on your program and what’s working.
Referral Program Software for Small Businesses
With the sheer amount of hats that a small business owner wears, any and all automation should be upheld.
The proper software programs can take the busy work out of your referral system and get you back to the parts of your job you enjoy most.
These platforms can help you create and manage your program, track referrals, and more!
The best all-in-one software for small businesses is ReferalHero. It has everything you need to build your program, and all the tools to keep it running long-term.
With experience scaling companies of all sizes, you can trust that ReferralHero has the solutions for you.
The Bottom Line
Referral programs can be a great way to help your small business grow like CRAZY by harnessing the power of word-of-mouth marketing.
With the right plan in place and the proper software in your corner, you’ll be flooded with new customers faster than you can say referral!
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