Client Compounding Through Referrals
No, we are not talking about compounds and polishes here. By definition, compounding means to increase, augment, deepen enlarge, or grow. How does this apply to your client’s? Your existing clients mean more to you than you know. If you are operating a productive referral program, your clients are going to assist you in compounding your customer list.
Your marketing efforts are going to begin to yield some amazing results over weeks, months, and, ultimately, years. Combine that with referrals, and you are going to get more repeat business and your profits are going to grow. That’s compounding clients!
Just like investing in stocks, mutual funds, or just putting money away in your savings account, you can grow your customer base when you have the proper referral program in place and are performing your online and offline marketing efforts with vengeance. You need to be screaming your messages loud. There is a great deal of noise competing for our attention, so you need to make sure you marketing efforts are seen and heard.
9 out of 10 customers trust peer recommendations, another word for referrals. A good referral program will supercharge that word-of-mouth growth for your business, but what makes a good referral program?
Simply put, a good referral program will have three winners. Your existing client wins by receiving a nice reward for referring you, your potential new client wins by receiving a nice offer, and you win by gaining a new customer. Do this over and over again, and you will compound your clients. Here are 6 ways to make your referral program effective…
- Make sure your referral program is targeting the right kind of customer. The last thing you want is new customers that aren’t a good fit for you.
- Your referral program design and user experience must be simple.
- Easy to understand
- Appropriate rewards and offers
- Simple sign-up methods
- Simple eligibility
- Easy to redeem
- Select rewards that your customers will value and that you can afford. Rewards can be a credit good towards future work, or a free service on their next visit. A good offer can be similar, maybe a free service, or a discount for a first time referred customer.
- Promote your referral program by marketing it to your customers. Make sure they know it exists. The most important and effective way to do this is face-to-face. You and your staff need to educate your clients and ask for the referrals. Of course reminders through messages on your website, email, blogs, social media, etc. can all help spread the word.
- Remarket your program. Don’t’ stop promoting your referral program, consistency and repetition is key to its success. It’s important to look for opportunities to generate additional reminders about your referral program. You can run promotions or add additional incentives. Most importantly, always thank your client’s for their referrals
- And finally, measure and tweak your program. I’ve said before, if you can’t measure it, you can’t manage it. Make sure you can measure your program, monitor its effectiveness and continue to tweak it overtime until it performs the way you want it to. Here are a few things to keep an eye on…
- How many of your existing client’ are referring you?
- How many of your client’s continue to refer you overtime?
- Is the cost per acquisition of your program sustainable?
A good customer referral program is a great way to retain customers, compound your customer list and drive word-of-mouth marketing. It can create advocates for your company that will keep it growing for years to come!