Let’s face it, there is a limit to the amount of money a client would be prepared to spend with you over time. But there is no limit to the amount of referrals they can send to your business. This is why it’s important to set up an active client referral program and reward customers. Not just for buying from you, but also for referring new customers to you.
Many large supermarket chains and franchises have implemented loyalty programs where they give customers cash back. Customers swipe their loyalty cards and then receive a percentage of cash back in vouchers or credits over a period of time. You can apply a similar principle in your business. But instead of rewarding customers for just spending with you, you also reward them for referring new business to you.
Ideas For Creating Formal Rewards For Your Customers
Be generous in your rewards. Make it something that will be really worthwhile and that will get people talking. For example: If a customer refers two new people to you, send them a bottle of champagne as a thank you. If someone refers four new customers to you, you could hire them a Porsche Boxster for the day. Now before you think that this idea is over the top and you’ll never be able to afford it, let me explain.
Let’s say that your profit per new customer is £50. For four new customers your profits would be £200. To hire a Porsche Boxster for a day costs approximately £180. This means that after you’ve paid for the generous reward, you not only have four new customers, you still retain £20 of profit.
Now think how nice it would be to drive a Porsche Boxster for a day and how much your customers will talk about it. Chances are they will make a point of heading out on the town and wherever they go their friends and acquaintances will ask how they came to drive the Porsche. Each time they will tell people about your business and your reward program. I can almost guarantee each person they tell will be thinking: “Maybe I should buy from that company and refer some people. It would be great to drive a Boxster for a day.”
Another idea for retailers is to give a discount for every client referral. For example: A clothing boutique could offer existing customers a £20 discount voucher for every customer referred. Plus the new customer being referred gets a £20 discount as well. It’s a win-win for everyone. It also provides an incentive for new referrals to refer other people to your shop. The more referrals they send you, the more vouchers they earn. In the process you are building good relationships with your customers and at the same time growing your business.
Smart Marketing With Client Referrals
The idea behind giving formal rewards is that you are actually enrolling customers to be walking adverts for your business. Instead of paying for adverts, you’re rewarding customers for referring business to you. It’s a smarter way to spend your marketing budget and a great way to build stronger relationships with your customers.