A referral programme is a very cost-effective and low risk way to reward your loyal customers for recommending new ones. It’s a very powerful marketing tactic to get existing customers to talk about you and help you acquire new ones.
According to a Nielsen report 83% of people trust their friends’ opinions. Although an old cliché, people buy from people, and that’s because there is immediate confidence and credibility to their testimonial. Led by trust, these future customers have the potential to quickly convert.
In summary, these are the key benefits to a referral programme:
- Turns customers into loyal ones
- Helps you build on your testimonials
- Expands your reach and awareness
- Converts leads into customers faster
If you are now ready to set up your referral programme and are looking for ideas, this blog is for you, and to make it easy we’ve broken it down into a 4 step guide with inspirational ideas you may want to consider.
Set the goal you want to achieve with your referral programme
Before you get started, decide on what you want to achieve with your programme. You want this to be clear and measurable. Acquiring new customers may not be your goal or what you want by the end of it. Some businesses will be looking at increasing sales or loyalty to get more advocates and improve on retention. Once you have decided on your goal, think about how you will be measuring progress and what are your referral sources.
Decide on your incentive or reward
The most successful way to get this right is to encourage insight from your customers to determine what incentive or reward will motivate them. Non-cash incentives such as in-store credits or priority access boost customer retention and sales. You don’t want to spend endless hours tracking and calculating incentives manually. Instead automate as much of this work as possible to save yourself valuable time. Choosing a conversion event, for example, the reward is applicable once the customer has booked a class or session with you and made full payment. This will eliminate any doubts and set the boundaries for when claiming a reward.
Decide on your advocates
The most critical part of the programme is choosing customers that are as passionate as you are about what you do and know your brand. Share your mission with them and draw some parameters. Work out the tags or hashtags and key messages you want them sharing.Consider the following:
Who do you want to target?
What do you need them to do?
How can they achieve this?
Promote your referral programme
Tell your customers about your programme, chances are they aren’t aware and/or need reminding. Your most loyal customers should be your first place to get started. These are people that love your classes or sessions and have probably already advocated your business more than once before. However, make it easy for your customers to share your services and get rewarded. Social media has become a popular channel to share information and get the word out, but it has to be a simple process for both the referrer and referee, or they will lose interest.
A referral programme creates a win-win situation for all. Your existing clients get rewarded, feel valued, and you get quality leads for new customers. The more customers you get to tell their friends about your classes or appointments the more opportunity for new business you create.
Take a look at what some brands are doing!
Uber’s referral programme has 2 parts. Uber gives drivers and riders a unique referral code to share with friends interested in creating a driver or rider account. When a referral is successful a payment reward is made.
In parallel, they run a user referral programme too that works very similarly. When a user shares their code with a friend and that friend signs up they both get their next trip for free.
Dropbox allows you to earn extra free storage space when you invite friends to try it out. Basic accounts get 500 MB per referral and can earn up to 16GB. Plus accounts get 1 GB and earn up to 32 GB per referral.
How do referrals work on Gymcatch?
There are many ways to use Gymcatch’s features to run a successful referral programme and reward your customers. Our Discount Codes bolt-on, for example, allows customers to invite their friends and family at a fixed amount or percentage off. This is great when wanting to encourage loyalty and improve retention.
You can also use bundles and make them available for purchase for a limited time and remove it from sale at the end of the offer period. These are included as part of the base plan and although mean a little more planning are very easy to set up.
Our own referral programme means customers get rewarded with 2 free months and receive a cash reward when referring a new business. The referred business gets an extra free month directly into their account when registering with us.
I am a marketing and business development professional with experience in delivering successful marketing strategies for client acquisition and retention. I have a passion for building engaged communities across different channels working with partners to amplify messaging. Ene’s focus at Gymcatch is on growing and maximising strategic partnerships through business collaboration.