Do you have a referral program? Whenever a new client comes to me for marketing help, one of the first questions I ask is “do you have a referral program?” I often hear things like, “I thank clients if they send someone to me, but I don’t have a formal referral program.” This is better than doing nothing, BUT if I can be blunt, a lax effort like this will really help you grow your business. There’s a better way!
Why You Need A Referral Program and How to Get One Started
Save Money But Keep Your Name Out There
It’s easy to spend thousands of dollars on advertising campaigns each year. Sometimes they work, sometimes they don’t. When that ad you placed in your local paper doesn’t bring in any clients, or even worse, it brings the WRONG client, what’s next? Nothing. You’re out what ever you spent and you have no new clients to show for it.
Before you sign on the dotted line for another advertising campaign, I want you to think about this. Wouldn’t you rather give a loyal client $20, even $50 or $100 off their next service, to introduce you to another client just like them than give a media outlet your hard earned money with no guarantee of results?
Advertising campaigns require you to spend money, with no guarantee of results, where referral programs ONLY PAY for results. This is why you need a referral program. A well executed referral program can help you save on your traditional advertising budget while continuing to help you grow your business. It can also be great for client retention. Clients like to know that you value their business and a referral program is a great way to showcase that.
Plus, we’ve all heard the old saying, birds of a feather flock together, right? If one of your loyal clients refers you, it’s likely the person they are referring will be similar to them which means you’re probably getting your ideal client, WITHOUT the trial and error part of figuring out targeting through advertising campaigns.
DISCLAIMER – I’m not saying abandon all paid advertising. Paid advertising has it’s place in every marketing strategy. I’m saying keep it simple to start. Create a referral program that rewards the people that support your business. Leverage it to grow your business. Then, build strategic advertising campaign to promote specific things.
How to Start a Referral Program
Create the Offer
A referral program doesn’t have to be complex and you don’t need fancy software to manage it…if you don’t want it. To start, create something that rewards BOTH the referrer and the person referred. How you structure your referral program is completely up to you. I’ve seen things like both get a:
- Percentage off their next service.
- Dollar amount of their next service.
- Value add, something like a free add-on service or an upgrade of some kind.
In my opinion, flat dollar amount works best. People love coupons and knowing they are getting to get X off, is good way to entice them! If you have higher priced services, don’t be shy with the dollar amount your client will get off. For example, if you do injections and your average service is $700, give clients $100 off their next service. I know you’re probably gawking at $100 off, but think of it like this, where else can you advertise for $100 and get guaranteed results? I’ll tell you…the answer is no where.
Promote Your Referral Program
Once you create your offer, now you’ve got to promote it. I suggest creating a marketing communications plan, similar to what you’d do if you were launching a new product or service. Your plan should include:
- Emailing clients
- Posting to social
- Creating content on your website about your referral program
- In-studio signage
- Referral cards (I’ll dig in to this in the next section)
Now, here’s the mistake many practitioners make. They come up with this awesome program, they launch it, promote it and then never talk about it again. You have to consistently talk about your referral program or your clients will forget about it. If you truly want to use it to grow your business, you’ve got to keep reminding people they can essentially get paid for talking about you.
Track It and Manage It
I always hear, “I don’t have time to manage something like this.” Ok, great, then your options are to spend thousands on advertising that doesn’t generate results, OR figure out a way to simplify your program so it’s easy to track and manage. Yes, there are apps and programs out there that work great if you want to go that route, but you totally don’t have to.
One of the easiest ways I’ve found to track and manage a referral program is to use referral cards. They are physical handouts that are normally business card size. On the card, there is a place for the referrer to write their name. The referrer writes their name in, then hands the card to the person he/she is referring and that person brings the card to their first appointment. It’s basically like passing a coupon to a friend. I realize this is a little “old school” but it keeps things simple to start.
When you receive a card you make a note in the referring client’s records that they sent someone in and get money off their next visit. If you have a booking system that allows you to add credits to people’s accounts, create a referral credit and enter it that way. Then, email or text the referrer. Thank them for the referral and tell them what they are getting in return. If you don’t want to do this as they come in, start a list then once a week sit down and reach out to everyone that referred you in one shot. When they come in and use their credit, update your records and you’re done!
It doesn’t have to be complicated to start. If your referral program takes off and you need to find ways to automate it, there are certainly more sophisticated systems you can put in place. Many booking software now come with referral resources too.
If you’re ready to get started, I’ve created a referral card template in Canva that you can edit to fit your business’s referral program. Here’s a link to the instant download.
If you have questions about starting a referral program, contact me.