October 26, 2017

How to build the perfect referral program

Your company is awesome, which means you already have a handful of brand evangelists. (Not sure what a brand evangelist is? Check out this post.)

Yet no matter how much your fans love your business, they can only sing your praises for so long without a reward. A referral program, which compensates customers for bringing new business to your brand, will keep that tune going for longer.

How does a referral program work? Here are the basics:

What are you referring to?

Before you kickstart the program, it’s important to decide what kind of promotion will be the most valuable to your customers–– and how the referral process will work. For example, a social justice-centered company might give a charitable donation in exchange for a referral. Other types of business might offer a two-way incentive, like “Send your friend 20% off, and get $20 for yourself.” Alternatively, if you’re a software company, you can offer a monetary incentive for every time a referral downloads your program.

Lastly, your brand can offer a one-way incentive: a reward that encourages people to try your offering for the first time. This is fairly common in the fitness world; lots of gyms and yoga studios offer a first month of unlimited classes at a steep discount. This inevitably gets people in the door, and hopefully willing to pay a higher price for the following month.

Where do your customers come from?

How do new customers find you? Is it Facebook? Twitter? Your website? Make sure that this platform is the hub for your referral program. If someone visits the site, it should be clear that you’re offering people a bonus in exchange for others’ brand engagement.

Not sure how to make it obvious? Try advertising your new referral program in your Facebook banner, or adding a signup box to your website. The easier you can make it for people to participate, the more involvement you’re going to get.


Who are your biggest brand fans?

You can try and convince people of your company’s greatness for days–– but nothing sways more than a great testimonial. If you’re struggling to get people to review your business, a discount in exchange for a review works wonders.

If that doesn’t fit with your business model, offer to link to your customer’s business in exchange for spotlighting their review on your website. While some people are happy to give a glowing review with nothing in return, you can increase the amount of fan feedback by offering an incentive.

What will they earn?

Your customers shouldn’t be the only people who get rewarded for promoting your brand! If anything, the best referrals should come from your own employees. (And if not… you might have some internal work to do.)

If you have the bandwidth, create an additional referral program that is designed for in-house staff. Bonus points if you make it into a competition! You’re going to get a lot more referrals if the employee with the most attributed signups gets something awesome at the end of the month.

Referral Program

What’s the reward?

Once you’ve earned a new customer, it’s important to make their first experience with your company memorable. The early stages of a customer’s experience are the perfect time to deliver delight. Why not surprise them with an additional discount code, or a gift in the mail? These additional touches are the perfect way to show your customer that you care, to reduce churn rate, and increase the likelihood of a referral down the road.

Have a successful referral program at your business? Share your tips in the comments!


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