As a small business owner, I’m busy.
On any given morning, I can be found sitting cross-legged in my office chair, chugging a cup of coffee. Maybe I’m sending invoices, asking for a client update, organizing my schedule, or working on a post for my personal blog.
Trying to keep track of everything is difficult, and I barely have the brain space to think about getting new clients. That’s why I believe in the power of referrals.
Almost all of my work comes from client referrals. My existing clients are happy with the work I provide, and they pass my name on to others who need my services. This means that I don’t have to spend my precious hours writing cold sales emails. Instead, I can focus on doing great work.
You too can create a referral program at your small business, and you can do it without a ton of time and energy. Today, I’m going to explain how to build a referral program into a small business without going crazy.
Step 1: Assess Your Current Referrals
Do you know how your customers find you? Many small business owners have some idea of where their clients and customers come from, but they aren’t digging deep enough to understand how word of mouth is affecting client acquisition.You need to understand how many referrals you’re getting in order to figure out how to get more.
When customers sign up for Grasshopper, they’re asked how they heard about the virtual phone services. This helps Grasshopper understand which marketing and advertising initiatives are successful, and allows the company to get an idea of how many people are coming because of referrals.
I work with my clients on a one-on-one basis, so they’re not required to sign up for my services on a website. Instead, I ask them how they found out about me, and I mark their answers in my CRM (I use Streak), so I can keep track for future reference.
Step 2: Decide on a Program
Some of the most successful small business referral programs run on their own. They don’t require you to manually ask each and every customer if they’d be willing to recommend you to a friend. Instead, they set up an incentivized program that encourages customers to make referrals.
One of my favorite examples is from Budsies, a company that makes custom stuffed animals. Alex Furmansky, Founder and CEO, created a referral program that rewards both the current customer, as well as the friend she refers. “I think it’s extremely important to have a two-sided referral program — the existing customer should get a reward, but their friend should get one as well,” said Furmansky. “For us, the existing customer gets a $20 gift card, and their friend gets 20% off a current order.”
But part of the reason Budsies’ program works is because Furmansky carefully considered what would provide value to each party, and thinks of the program as a small part of a greater customer experience. “We really care about our customers’ happiness,” said Furmansky. ”We provide consistency across the experience. Our referral strategy is part of a real, heartfelt program that gives even more value to our customers.”
Step 3: Make it Easy for Customers and Clients
A successful referral program is easy to use. If your referral program is buried deep inside your website, customers and clients won’t be able to find it. You need to create a process that makes it easy for customers and clients to participate.
I highly recommend using trigger and time-based emails to let clients know about your referral program. You can automate an email that goes out 30 days after a customer signs up, offering them value if a friend of theirs makes a purchase.
Additionally, you want to make sure you have a back-end system that can support the referral program. You don’t want to promise each referred client $20, but then have to manually send out fresh bills each time you make a sale. A lot of tools make referral programs super easy. My personal favorites are Referral Rock, which is engineered for small businesses with nimble teams, and Influitive, which is better suited for mid-size companies.
Step 4: Leverage Existing Brand Advocates
In order to bring in more referrals, you have to provide products and services people that solve people’s problems. If you’re doing that, you’ve already collected a few brand advocates. These are the people who are willing to advocate for what you do.
After I wrap up work with a client, I ask them if they’d be willing to write a testimonial, usually in the form of a LinkedIn review, to share their positive feelings about the work I’ve done. If I want to ramp up referral generation, I can simply reach out to those who’ve left me a positive review in the past, and ask them to keep me in mind if they know anyone who’s looking for the work I provide.
If you have clients and customers who’ve left your business positive reviews, then reach out to them first. These are the people who will be likely to participate in an official referral program.
Bring in the Referrals
I’ve seen many small businesses flourish on account of effective customer referral programs. As a small business owner myself, I’m always looking to optimize how I gain clients, and referral programs are an excellent strategy that I recommend to companies — large and small.