How to Build a Simple, Effective Referral Program | Optimum Small Tips for Small Business

Most small businesses can tell you the best way they attract new customers - but most of them aren't taking steps to do so.

Sound odd? Welcome to the sometimes misunderstood - and vitally important - task of generating business referrals. Business consultant Michael Rozbruch polled several thousand small businesses, and 63.4% told him that half their revenue came from referrals. Despite acknowledging their importance, 80% of those companies said they had no system for generating referrals.

That's lots of money left on the table. A sound referral program doesn't have to be hard. Here are six steps to building one:

1. Set a goal. Rozbruch recommends keeping referrals top-of-mind. Target asking six to eight people a day for referrals, and keep at this for 21 days. Three weeks of such repetitive behavior will make asking for referrals a habit.
2. Time your request. Service providers such as accountants should request a referral from a client at the first meeting, according to Rozbruch, since it might be their only face-to-face interaction. Other suggest a referral request should come at “a happy moment” -- immediately after a client has expressed gratitude for your service or purchased a product.¹
3. Spell it out. Delineate who your ideal client is and how your products/services would benefit them. This makes it easier for people to know who to refer to you. A tax attorney could send a letter to clients explaining his range of services and offer a free consultation to anyone the person refers - that gives the referrer the good feeling that he is doing a favor for a friend.
4. Ask in many ways. Rozbruch recommends asking for referrals in person, through letters or phone calls, and via your website (include a large button that says, "Refer a Friend").
5. Track your progress. You should track your referral program to know how effective it is. Create a simple spreadsheet with:

• Existing client's name
• Person's name they referred
• Date of contact
• Results
• Follow-up

1. If you connect with people online, automate the process, Thank the referral. If someone sends you a referral, thank them immediately via email or personal letter. A tangible reward, such as a discount on a future purchase, also is important.

Kelly Newsome, president of ConnectRoot, a networking platform for people in the financial industry, likes referring friends to her online marketing provider; both she and her friend get a free month of service, and the provider sends her an immediate thank you - which reaffirms her belief in them.

A referral program can work hard to build your prospective customer pipeline. In addition, it's a valuable extension of your customer service, building loyalty among current customers, who view it as a perk. To that end, it makes sense to amplify your customer service benefits in any program description you might create. The Optimum Business Service Commitment, for example, is a promise built on exceptional service. It includes several key benefits, including providing a same-day service guarantee, no annual contract, and 24/7/365 live support plus more.

To learn more about Optimum and how we can help your business, call or chat today

¹“12 Terms You Need to Know Before you Launch a Referral Program,” Referral SaaSquatch (http://www.referralsaasquatch.com/12-terms-you-need-to-know-before-you-launch-a-referral-program)