A good referral system is something that every business can always use.  Referrals are, of course, some of the best clients and customers because they are generally easier to sell to.

There are many different referral systems you can implement in your business, but for the referral systems to work you must understand and have several key components.

 It must make you memorable

 The referral system must keep you top of mind, in your client’s, prospect’s, and referral partners mind’s.  Why is this so important?  Most people are completely overwhelmed with things to do.  Giving you a referral is generally not #1 on someone’s priority list.  If you don’t keep top of mind then you will struggle to consistently get referrals from your referral marketing system.

 You must educate the entire team on the plan and strategies

It is critical to brainstorm your ideas ahead of time with your staff, friends or anyone who may have valid input to offer. As with any business practices, make sure your entire staff is familiar with the process of management, as well as the process of referral new customers your way. Whenever possible, also allow them to be one of the sources of creative input as the most successful referral programs are created and carried out by full team efforts. The more creative the program, the more successful it will be.

Use different techniques for different segments

You need completely different referral approaches and offers for customers and strategic partners. By targeting your approach to these segments you can more easily develop programs that make sense and motivate for the right reasons.

  • For customers the likely motivation is that they like what you do so much they want to refer you and you simply need to stay top of mind and make it easy for them to do. Tip: Ask and remind!
  • For partners the motivation is quite different. Your job here is to effectively position referring you in a way that helps them add value to the relationships they already have with their customer. The simplest way to do that is create valuable education-based content, in the form of webinars/seminars, then take it to them and propose they share it, as well as co-brand, with their own customers. They know they should be doing this so you’ve just made it easy for them to do something they want to do and you win.

It should be worth the referrer’s effort

The referral system must make you stand out and help educate your prospect, client, or referral partner on why it is good to do business with you (versus someone else) and why he or she needs to give you a referral.You must explain the benefits, whenever possible, that exist for people giving you referrals in your referral system.

But… you must remember that reward is equal to effort

All successful referral programs definitely have this one key element in common. Having a reward system isn’t good enough unless that reward is equal to or greater than the effort it takes your customers, sales team or employees to carry out. A system where an individual must refer ten purchasing customers for a minor award is likely to fail and fast. It is better to provide a scalable system of rewards if you want your business referral program to succeed.

The simpler, the easier, the better

While some of your program details may become quite detailed, it is always best to keep your strategies as simple as possible. Limit them to a very small number when possible and make sure they are easy for your referrers to stick to and still be successful in drawing in referrals. Again, if the reward isn’t worth the effort, all efforts will eventually be lost. When at all possible, dedicate an entire webpage to your referral system. Include contact forms and interactive methods of participation in the program where you can. If people can refer you 24 hours per day, you are likely to receive a more diverse and large crowd of referrals.