How to Build a Customer Referral Program

Tuesday January 26th, 2021

How to Build a Customer Referral Program

One of the basic tenets of customer success is using your service to create advocates for your business. A happy army of satisfied customers can do a lot of legwork for you. And when word-of-mouth referrals make up 20-50% of most purchasing decisions (especially for new businesses and in emerging markets) why not take advantage of the opportunity?

But there’s a catch: assuming your customers will refer you to their connections simply because you provide exceptional service is idealistic at best. Referrals only happen out of the good of a customer’s heart some of the time — for the rest of it, giving customers a reason to refer will work wonders. As with most things in business, a plan is necessary.

If you’re looking to grow your business, retain the customers you already have, and reach your revenue goals, it’s time to implement a customer referral program. Simply having one is good business sense, because it reveals two things:

1. That you’re confident enough in your services and team to know that a referral program would be a positive investment and

2. You know that despite your good service, some customers might need a push to go out of their way for you.

The reality is, however, that you’re effectively asking your customers to stand in place of your marketing and sales departments. And when referrals are the heart of generating new business, operating with tact, consistency, and patience is extremely important.

What Exactly Is a Referral Program?

A referral program is a word-of-mouth marketing tactic that encourages customers to advocate on behalf of your brand. Rather than writing reviews online, or submitting customer feedback surveys, referral programs let customers share their brand experience with partners, colleagues, and friends.

The purpose of a referral program is to attract new leads to your business. But, you’re not just bringing in anyone. By asking customers to think about people who would benefit from your product or service, they’ll refer leads that are a good fit for your brand.

This only makes it easier for your marketing and sales teams to nurture and engage customers because not only are these leads a good match for your business, but they’re also familiar with your company and its reputation. Since they’ve been referred by someone they know, they have a reliable resource telling them that your company is trustworthy and produces a positive customer experience.

If you’re ready to start leveraging word-of-mouth at your business, read on to the next section for tips on how to create a customer referral program.

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