Designing a Referral Program
From cars to lacrosse tickets, a Google search for “referral programs in Denver” yields many interesting results. While garden variety loyalty programs pop up like pot shops on South Broadway, referral programs are a rarer breed.
A great example of a successful referral program can be found at Allure Salon in Denver, www.facebook.com/AllureHairStudio.
When you are checking out, your stylist hands you a business card offering you $20.00 off your next service for every new client you send in. That person also receives $20.00 off their first service. There are no limitations on how many people you can sing their good graces to, which encourages new friendships with people you hardly know (or perhaps that’s just me.)
I checked in with Nicole, a stylist who has been with Allure Salon for 8 years. She relayed that the entire time she’s been there, the referral program has been in place. According to her, all of the stylists promote it and have found that many of their new customers discovered Allure this way. My friend Alison referred me to Allure using one of these cards and that was five years ago. I in turn referred at least two other people using the cards.
Rather than spending all of your time trying to garner new customers from online marketing methods, referral programs are a great way to diversify your marketing efforts and let your biggest advocates (best customers) do the legwork for you.
Two things to think about prior to launching a referral program:
- Know what you want to get out of it.
Are you looking for a 10% boost in sales? A set number of new members to your club, gym, subscription based service? If you don’t know what you’re looking for you sure as heck won’t know when you get there.
- Know your brand champion/biggest advocate, know what they like and how they share what they like. Do they post on Instagram? Or are they a big Yelper, perhaps an Elite Yelper with hundreds of online reviews.
Understand who frequents your business and who regularly replies on your Facebook page. Determine what they might be seeking and what forum would be best for them to share what they like about your business. If your Facebook page does not have many likes, it might be better for customers to post on Yelp.com or Trip Advisor. Either verbally, or at the point of checkout, make sure to advertise your referral program. The gregarious kind of people who could form a bond with a fern, no wallflowers need apply, are the IDEAL referral advocates.
Here are five steps to a successful referral program:
- It’s all about the timing.
Having an event for your members? Tell them to bring a friend.
Right after they complete the checkout process, have a way for them to click on a button to refer your business to friends. Or as in the case of Allure, give business cards.
If you notice that a customer has submitted a review or testimonial on your site or someone else’s (Yelp, Trip Advisor), reach out to let them know about your program.
- Thank people for their review. Do it by email if you have to but a phone call or in person thank you is better.
- Make sure what they’re getting is worth it. The $20.00 referral discount for a haircut is a great incentive. A typical haircut at Allure and many other salons is $60.00 range, so a savings of 35% is enough of an incentive, especially when it’s a service that you will need, well, until you’re dead. And even then your fingernails and hair still grow, right?
- Better yet, make sure the referred party feels the love too. Like Allure’s program, reward both parties, ideally with incentives of equal measure.
- Track, Track and Track! Without knowing if your referral program is working, you won’t know if it is worth your time, or who among your customers are the best ambassadors to help you grow your business.
For referral program ideas, contact Red Egg Marketing at (720) 446-6640!