How To Create a Referral Program for Your Small Business
How to create a word of mouth marketing program for your small business.
What is a word of mouth program or WOMM?
Word of mouth programs are a kind of marketing method that incentivises people who have worked with you, or who might work with you, to spread the word about your business. If you’re like me, an experience with referral programs that comes to mind is when your hairstylist gives you a card that offers 20% off a service for a friend of yours. This is a great start, but it’s only about half of what you should be doing to create a referral program that works.
Why do you need a word of mouth marketing program?
No matter how good your marketing skills are, word of mouth marketing continues to outperform other marketing methods.
Not all studies are created equal. But this study by Neison questioned 28,000 people in 56 different countries. That’s a lot of people, and the more people in a study usually means the more trustworthy it is. According to Neison, can you guess what the most successful marketing tool for small businesses was in 2014? It was friend referrals. 92% of people questioned said they would trust a friends referral over any form of marketing. That’s an increase of 18% since the last study was done in 2007. Personally, I don’t think this trend is slowing down.
P.S. This study is pretty intense and a good read if you’re committed to improving your small business marketing. Here’s a graph they created for your viewing pleasure.
3 Steps to create a word of mouth marketing / referral program
Offer a reward. Make it BIG and enticing AF to past clients.
Make a referral offering for allll the new referrals you’re about to receive.
Write out your email pitches, and send those babies out.
Notes on #1 - Make your referral program BIG and enticing AF to past clients
This is the first step in developing a referral program so you need to make it seriously enticing. If a new client is worth $4,000 profit, how much can you afford to give away in exchange for referrals who actually sign up and pay for your services? How much are new leads worth to you? If possible, do some math to figure out how much you can afford to offer people for either leads or signed and sealed new clients.
If you can’t offer monetary rewards for referrals, can you offer any of your services or products for free? If not, can you offer a generous discount? Make sure this offer you come up with is something your clients will want.
Maybe you’re not seeing how referrals could work for your business. You can still use this 3 step program as a method to collect reviews on Google, Facebook, Linkedin, or anywhere else your dream clients may be lurking, and looking for services/products like yours.
*Note: While you can offer monetary rewards for referrals, you can’t legally bribe people to leave reviews unless they state in their review that they are being paid for the review and that the review is still true. You can read more about the law of offering money for reviews here.
Notes on #2 - Make a referral offering for the allll the new referrals you’re about to receive.
Not only should you create an offering for the past clients you’ve worked with, but you should also have an offer for the new referrals you’re reaching out to. Create an offer to warm them up to the idea of working with you. This is especially important if your past client is not introducing you directly.
Even if it’s something as simple as a ‘free consultation’. Find a way to offer more value to the people who you’re reaching out to so your initial outreach doesn’t end up sounding like a sales pitch coming out of left field.
Notes on #3 - Write out your email pitches, and send away.
This marketing endeavor needs to be handled with professionalism. Here’s a great starting off point for reaching out to possible word of mouth marketers.
Start by re-introducing yourself. Make your email personal, briefly reference their project and how much you enjoyed working with that person/business. *No one likes a canned email.* Then mention that you have a new offer and list out the details.. Keep your it brief, 6 sentences or so. Don’t take up any unnecessary time if you can avoid it.
Asking by giving is a great way to get things moving for your business. Instead of going to past clients and saying, “Can I get a list of referrals from ya?” which might make them feel uncomfortable, offer them something they want! Letting them know that you have a sweet deal for them is a much more professional and less invasive way to look for leads from past clients.
Examples of referral offers:
A reimbursement of the fees that your client has paid you, in exchange for 3 paid customers within a year.
Offer a credit for future services to past clients and referrers, and a discount for new referrals.
Create your own “stamp card” so if clients refer 3 clients that buy your product, they receive a free product from you.
Offer small cash rewards for reviews on google, linkedin, facebook, etc. Just make sure you do are doing it right, you law abiding citizen, you.
Offer discounts or gift cards to people who post about their experience with you (and tag you!) onto their social media accounts. Word of mouth marketing on social media still counts as Word of mouth marketing!
If you want more information for setting up a funnel to collect reviews and referrals from your past clients, fill out the form below. A funnel for collecting this information is an inbound marketing technique that can help your business expand, almost effortlessly.
Based on the studies we talked about at the beginning of this post, here’s your action plan.
Your main goal with a referral program should be to gather referrals of people who might like to work with you from your past clients. Since people trust their friends and family more than online reviews, this has the opportunity to create a serious good return for you.
Make a sweet deal for both your past clients and new referrals.
Write out an email pitch that is short, sweet and to the point. Ask for what you want by giving something sweet to your referrers and referrals.