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How to Set Up a Referral Program for Your Business

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Getting new customers takes a lot of time and money. Make it easy for yourself and set up a referral program! Word of mouth is one of the best ways to grow your business, and the customers you already have are your “low-hanging fruit.” 

It doesn’t matter how many five-star ratings your products might have online because the most trusted reviews are those that come from a friend. You should be tapping into your existing customer network to get new customers. 

So how do you ensure that customers will refer you to friends on your behalf? Here’s how to create a referral program:

Step 1: Set your goals

Determine what you want to get out of your referral program. Are you looking to increase your customer base by a certain percentage? Maybe your goal is to have each customer refer at least one other potential customer. Setting your sights on a goal will help to map out your program.

Step 2: Choose your candidates

Who do you want to advocate for your business? Should your program target your most reliable customers, or should it incentivize your newest customers?  Maybe you want the program to be inclusive to everyone. Consider several options to assure, which makes the most sense for you.

Step 3: Define the program

Now that you have mapped out for whom the program applies, you want to consider what you are offering. Firstly, determine what kind of deal will incentivize them the most. Most referral programs go as follows: a customer must refer one friend, and they and their friend both receive a specific discount on their next order. You must determine what this will look like for you.

Additionally, you must determine how exactly the program will work. Are there certain products that are off-limits? Will the discount only be sent when their friend has made their first purchase?

Finally, you must consider timing. When will be program be implemented and for how long?  

Step 4: Alert your customers

Once you’ve created your referral program, it’s time to spread the news. Consider:

  • Sending out an email campaign introducing the referral program
  • Include instructions for the referral program as the signature of every marketing email. 
  • Market the new program on your social media platforms.
  • Talk about the referral program with customers at market, deliveries, or pick up locations.

With any marketing plan, it’s best to be persistent and consistent throughout the program’s entire existence to ensure it becomes known to your customers.

Step 5: Track the program

Monitoring your program is necessary to see if it’s working. You should be tracking who and when, who referred them, if the new referral made a purchase, and if they repurchased afterward. Tracking these metrics can be helpful to improve the program if you plan on relaunching in the future.

Step 6: Say thank you!

At this stage in the game, it’s time for some recognition. Follow up with your existing customers thanking them for their referral, and then thank your new customers for joining. Asking for customer feedback can be a nice touch, too. A little recognition goes a long way in keeping customers happy.

Referring to a friend is a win-win for everyone. Your existing customer is rewarded for their loyalty by receiving a discounted price. Your new customer is learning about your business from the most trusted source of marketing: word of mouth.

And, most importantly, your business just earned a new customer from an existing one!

Running your business is hard work. We want to help make it a little bit easier.

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