4 Steps To a Winning Referral Program

I know that things are pretty tough in the economy now.  But I still believe that businesses can grow and prosper in the coming months.  In good times and bad, businesses can fail or they can thrive.

Whether in a recession or not, you should always work to recession proof your business.  If you have done that all along, you are probably ready to weather the storm.  If you have not, don’t look back… look forward and begin recession proofing right now.

One of the best methods of obtaining new business in good times or bad is through referrals.  These are always the best customers because they come pre-qualified and excited.  It is much easier to sell to them than a call from say, the yellow pages.

How is your referral program doing?  Everyone gets referrals.  The trick is to maximize this.  Maybe you get 4 referrals a month.  That’s awesome!  Now lets double, triple or quadruple that.

Before you run one time referral programs designed at bringing a  big flow of new clients, make sure your ongoing program is strong.  Here are my 4 steps to a top notch referral program.

STEP #1 – Make sure you have an ongoing referral program.

Do you have a referral program?  What is it?

I am not speaking of one time referral promotions.  You can do those on top of what you normally do.

But to work it right, you need to make sure you have an actual ongoing referral program.  This is what you reward your client with when you get a referral from them.

Do you give them money, free service, thank you card or something else?  If you don’t give them something, they will eventually stop referring.  Even if it is just recognition for the referral, you have to give something.  The higher value thing you give, the more people will want to refer others.

It doesn’t much matter what you give.  I know many different businesses who each offer many different referral rewards.  All of them work.  It is not what you offer.

STEP # 2 Communicate the reward

Giving away a reward when people are referred does not mean you actually have a referral reward program. Your referral reward can be a luxury cruise to the moon.  If no one knows about it, it doesn’t exist.

The best way to know if you have a referral reward program is to go ask your clients what it is.  Call or stop one in the lobby and just ask if they know what they get for referring a new client.  If all of them cannot tell you, then you don’t have one.

You have to have a plan and process for:

• Explaining the program to all new clients
• Consistently re-educating existing clients about it regularly
• Making sure clients are always rewarded in a timely fashion

STEP #3 Build Enthusiasm

You have to be excited about it.  If you are not excited about it, you cannot expect your clients to be.

Communication isn’t enough.  You have to create a culture in your business where people want to strive for giving a referral.

There are many different ways to do this.  Be creative.  You can place pictures of those who referred a new client in the lobby.  You can give them a huge round of applause in front of all the other clients.  Take a picture of you giving them their referral reward for your monthly newsletter.  The ideas are only limited by your imagination.

STEP #4 Ask for referrals

Do you ask for the referral?  When do you ask?

The best time to ask for a referral is… whenever it is appropriate.  Don’t just ask once.

Of course you should ask when you close the sale.  Once your prospect becomes a client is the first time you should ask.  But keep a look out for those special times to ask in the future.

Maybe you hear a great success story.  How a shy little child was able to stand up to a bully and they give your school all the credit.  This may be a great time to ask for a referral.

If you have good rapport with your clients, asking for a referral every now and then should be just fine.  If the only time you talk to them is when you want something, you have a problem.

These 4 steps are simple yet powerful.  If you have a strong referral program, you will enjoy a consistent improvement in referrals all year round.