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5 Keys To An Effective Referral Program

Existing Customers Are Your Best Way To Reach New Customers

There are 2 times that people are likely to talk about your business: when they love you and when they do not. 

Fortunately, you can do many things to keep your customers out of the second group. Focusing on the first group is key! Not only does it feel good when people love your work, but those positive feelings can do so much for your business! 

Many of our clients turn to a referral program to motivate existing customers to spread the good word about their services. A referral program creates a structure for people to offer help in a way that makes it easy for everyone to participate.

Here are 5 keys to an effective referral program for your home services business.

A decorative graphic image encouraging people to unlock their success with an effective referral program.

1.) Ensure The Incentives Are Attractive To Your Participants

Notice that we did not say ‘customers’ here. Your employees are a vital part of any successful referral program. You cannot make this work without them, so ensure it works for them by rewarding them too.

Tovah Coats, Client Success Manager at LeadsNearby, says to think of the big-picture costs. “You’re paying a lot for PPC or LSA leads. Why would you pay less to employees or their family members? They’re a much better value because your chance of converting a lead from a team member is significantly higher than a lead off the street.”

Tovah also stresses the importance of rewards that speak to the target audience, adding that one-size-fits-all incentives don’t usually work. She is especially leery of company bucks.

“If your reward for referring someone is $50 off their next service, people won’t feel appreciated. It’s going to come off as an attempt to get more money out of them instead of as a genuine expression of gratitude.”

One of the best ways to ensure the incentives are attractive is to give people options. 

Everyone loves options. Providing options in a reward program is no different. People feel more invested when they have a choice.

As an example, maybe a referral gets someone the choice between a gift card to a local attraction or a donation to a charity you work with in the customer’s name. 

Options give you a chance to relate to people on their terms. You need to make sure the reward isn’t something that people feel helps the company more than it helps the customer.


2.) Your Referral Program Needs To Align With Your Brand 

A client of LeadsNearby, Perfect Service, has had incredible success with their referral program because it aligns so seamlessly with their brand. They are a company that stresses their involvement in the community, so the reward is s a gift certificate to a local business or restaurant instead of to a big corporation like Amazon.

Ultimately, the rewards you pick are a chance for you to highlight what matters to you.

Are you a family-run business? If family is an integral part of your brand then maybe the incentive for your employees is time off that they can spend with their family.

There are a lot of right answers to this question, you just need to make sure you pick the things that best align with your company values. 


3.) A Good Referral Program Is Part Of Everything You Do

A well-run program is one your customers hear about consistently. 

“If people only hear from you when you need a favor, they will feel a lot less inclined to participate – even the people that like you,” Tovah says. “Remember, if the program is designed to actually appeal to the participants, reminding them about it isn’t an ask. It’s an opportunity.”  

Call your customers in the fall and remind people that a referral is a great way to pick up some extra holiday cash. Not only does it help you when your demand for your services might be low, but you are also doing something that can strengthen your relationship with the existing customer!

“Consistency is crucial,” adds Stephanie Potter, Client Success Manager at LeadsNearby. “Is there something at the bottom of your emails about your referral program? Is it something that the techs are trained to say while they’re asking for a review? Your program needs to be common knowledge.”


4.) Make Sure You Are Clear In Your Guidance, Communication, And Objectives

Your referral program should be clear to your employees. They need to understand what your message is and when it gets delivered. 

When sending reminders, let your team know where those reminders go. Communicate when it will most likely come up – on the job site, during the happy call, or if it’s part of your post-job marketing automation.

A team with clear guidance is in the best position for success.

“Don’t be afraid to revisit the program from time to time,” adds Stephanie. “Something that is a big motivator this year might not be next year. If you don’t keep your club attractive and active, people will forget about it. You don’t want to have to reintroduce it every couple of years because the buy-in will decrease each time.” 

You will see much better results from a referral program that is consistently healthy and active. 


5.) Don’t Let A Poorly Run Referral Program Hurt Your Relationships

Do people have to call you looking for their reward? They will not be recommending you again.

Is it hard for employees to claim their recommendation? Chances are they will not put a lot of effort into it.

Tovah stresses the importance of positive and organized customer service. “I call it Doing Business Like A Mensch. It just boils down to doing things the way you would want them done for you or one of your loved ones. If someone calls and says, ‘Oh, so-and-so recommended me,’ make sure that you reach out to that person and thank them. Tell them about their reward options and let them know that you are better off for knowing them!”

If you don’t show appreciation with your referral program, you run the risk of alienating people who advocate for you. They’ll feel unappreciated and continue to tell people about you, but now the message will be much different. 


Your Business Will Live & Die By Your Relationships

The other crucial part of a successful referral program is making sure that people are pleased with the work that you’re doing.

It boils down to providing good service, says Stephanie., “If you’re not doing business in a way that excites people about working with you, you won’t be doing business for long.”

For better or worse, everyone can recall a negative customer service experience. All you have to do is remember what you disliked about those experiences and make sure you do not repeat them with your customers. 

“The bar is often really low,” laments Tovah. “Impressing your customers every single time is more than possible. It’s essential.”

LeadsNearby can help you keep happy customers coming back for years and bringing people with them. Call 919-758-8420 for a free, 25-minute consultation about your marketing strategy – or contact us online .

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