I often get asked by small and medium business owners that referral programs work for their enterprises as effectively as everyone says about it. Well, I think referral programs are great for every business regardless of the size of the enterprise because do they not only increase your consumer base but also improve the percentage of satisfied customers and reduce your sales expenses from your operations.
Wondering you should be you hire as referrals? There are no great referrals than your satisfied customers because they know what a customer thinks before purchasing a product.
Here are 4 types of referral programs you should know before your implement for your business:
1. Direct Referral programs
A direct referral is when one of your existing customers refers someone in their network. You could offer something in return to your existing customer when the referral turns into business. For instance, a retailer can offer sample shampoo or skin care lotions to his/her existing customer who referred a friend or family member who bought their products.
2. Implied Referral programs
With implied referrals, you make it kind of obvious that you are doing work for someone without directly asking for a referral. Let’s say, if a constructor is building a house in your society then they could send pamphlets to all the other houses in the society letting them know if they have any new contract they can reach to the builders. This way, the residents in the society will see the construction company as being helpful. Moreover, the residents can also get to see the finished product of the new construction house and may consider it if they need any work in the future.
3. Tangible Referral programs
With a tangible referral, you hand over some valuable thing to your existing customer and that they can give to the referral person. The impressive about this feature is that you can operate it to 4 times in a year as a low-cost way to keep referrals top in the list. Twice or thrice in a year you can send gift cards with 50$ or 100$ to your valuable customers and ask them to share it with their friends or family. That way you can turn referrals into customers and increase your sales.
4. Community Referral programs
There are a lot of organizations who need tons of support from businesses like you. Maybe you could run a promotion that can benefit both of your organizations. A fine example for this is a coffee shop that makes its income in the month of January donates 10% of it to charity. This way charity getting benefitted and you are promoting your business too. In such case, the charity is also likely to promote the business and will mention it to their customers because the more sales they make the more amount goes to the charity.
You first need to understand your business and the market it caters to so that you can build a better-targeted marketing and communication strategy to expand your business. And you can use referral tracking software to complete tracking and management of referrals.