Raving FansHow much time, effort, and money do you spend trying to find new customers?  How much time, effort and money do you invest in your current customers?  You may already know that the best source of new business is referrals, but sometimes it may feel like a lot of work or you might not know how to ask.  In order for the steps below to work, you must already know how to create loyal customers.  You should already be generating both written and video testimonials as well as having people automatically send you referrals.

Referral programs should not be left to chance.  You need to actively drive them, monitor the activity, evaluate the effectiveness, and adjust the methods to ensure that you are maximizing your returns.  And don’t forget the value of prototyping through pilot programs

A effective referral program is essentially a type of viral marketing campaign and the only way it will work is if your customers WANT to participate.  When they are delighted by your service/product, they should feel inclined to spread the word.  The steps below will help you create an online referral program that takes care of itself.

  1. Have the courage to ask.   Don’t just ask someone for a referral and expect them to do all of the work to get you new business.  If you truly have the three beliefs – yourself, your product, and your company – then you should have no problem asking your customer to share their experience with others.  If you don’t have those beliefs, then you have a different problem altogether.  Asking for referrals should not be a negative experience but an event that everyone wants to participate in.  Your customers should be excited to spread the word, and you should be excited to reward them with a “thank you” for doing so.
  2. Create brand ambassadors.  To put some strength behind your referral program, teach your customers how to be effective referral generators.  You have done a good job of building loyal customers, you have mustered up the courage to ask, and they have become excited about your referral program.  Now it’s time to make it sparkle!  Explain to your customer HOW they should tell their friends and what to tell them.  Make them feel special and appreciated and give them the tools they need – from their own referral cards to online links. And always get testomonials and show them off!  Written ones are good.  Video is better.
  3. Make it unique to each customer.  Leverage your CRM, include “forward to a friend” options, and use customer specific links that they can share with their contacts.   If you leverage your CRM, create an online contact form on a referral page of your website such as THIS.  There should be a way for them to enter their info and then the info of the people they refer.  This will add more leads to your database to follow up with and if they become customers, the CRM should associate to the original referee and reward them appropriately.  You can include an auto-responder program as well to make it automatic.  “Forward to a friend” links should be included whenever possible to increase awareness.  Customer specific links would be something with a unique URL like http://www.indochino.com/?r=60737 (check it out and make a purchase).  They can email them, post them in blogs, Tweet them, or Facebook them (this is a verb now).  By making it specific and unique, this will create a sense of ownership in the process because they have a tangible product to promote and they will feel as though they are part of an exclusive club.
  4. Leverage social media.  Give your customers the ability to share their experiences through Facebook, Twitter and other platforms.  Make it so that when they share, any click-throughs are associated to their specific ID to account for the referral.  They are already online talking about their experiences – good or bad.  Make it easy for them to be rewarded for something they would do naturally.  Read my “7.1 Strategic Steps for Social Media Success”
  5. Use an escalating rewards system.  Many referral programs are structured in a way that state, “for every customer you refer us that meet a certain criteria, we will give you a specific dollar amount.”  That is not the most effective way to get people to CONTINUE to refer.  By having each subsequent reward increase in value, you challenge your customers to achieve new levels.  Perhaps have a “superior” level with a huge prize that only a select few can achieve.  Give many rewards to one connector and they will climb mountains for you.  Give them $50, then $75, then $100, then $200 or a free something.   They bring you four customers and it costs about $100 per customer.  If you used traditional marketing instead, you might try to generate new leads through a promotion where you spend $50 per lead and offer a $50 discount.  Both end up as the same marketing expense, but which do you think would be more effective?
  6. Ask at the right time.  Each phase of your sales cycle may offer a chance to ask for a referral, however, the best time to ask is at the point of purchase. This is when they are the MOST satisfied with their relationship with you.  Prior to this is the decision making process and that is about them – don’t confuse it.   However, if you are sending an important message about a promotion through a campaign or a newsletter, include the “forward” link and encourage them to share with anyone who they think might benefit from your services.
  7. Celebrate the success of your program!  Showcase and broadcast the results of your referral program by listing your top ambassadors on your website, in your store front and in your sales presentations.  This will allow your brand to speak for itself and will show your potential customers that you are the definitive purchase they should make.

7.1   BONUS TIP!  Don’t just get referrals from customers.  How many other business might benefit from a cross-promotion strategy with you?  Think about it.  How well do you network?  When you network, think about how you might develop mutually beneficial referral programs by giving first.  Perhaps they get leads that they won’t convert which might be perfect for your business and vice-versa.  What about a mastermind group?  Can you give these partners their own unique referral links that integrate with your CRM?  Can you pay them a referral fee for sending you customers that they might not chase anyway?

How else can you create a system of referrals that is self-generating, where your efforts speak for themselves?  If you really are as good as you think you are, then you should have no problem creating an army of people ready to sell you to the world.

image by Tucker Sherman

Joe Girard
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    3 replies to "7.1 Steps to Create Raving Fans With an Online Referral Program"

    • […] Can you honestly articulate what your customers say about you? – Have you taken the time to get honest insight about how you are doing?  Do you have written testimonials?  Better yet, do you have VIDEO testimonials?  Do you have raving fans? […]

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    • […] Customer Service Plus TWO: You blow them away with your service and ability to solve their unique challenges. You are not looking for satisfied customers, you want loyal fans of you and your company. You look at a customer complaint as an opportunity to understand their problem, offer solutions, and do something extra that they will tell everyone about! Not only will people mention you on a comment card, but they will track down your boss and make sure they know how great you are. They will brag about your service on their social media sites. Learn how to make the most of the social media side with my post on creating raving fans with an online referral program. […]

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