How To Create A Referral Marketing Program

Referral marketing is a tactic that relies on word of mouth and recommendations to gain new business. It is one of the most effective forms of marketing out there, especially for local home service businesses. In this article, we will discuss how a good referral program can generate a significant amount of leads for your home service business.

Research shows that referral programs can generate high volumes of leads. By harnessing the experience and enthusiasm of your local community, you can quickly build your company into a beloved local brand. This increased brand recognition can also lead to more direct benefits for your business. Leads generated through referrals are 36 times more valuable than a lead generated by cold call, 10 times more valuable than leads from events, and 4 times more valuable than a web lead.

There is a clear and obvious reason why so many successful businesses use referral marketing, because it works. Referral marketing generates good to excellent quality leads and represents a very high source of quality leads overall. For home service businesses looking to market within local communities, referral programs can be even more effective because a positive review from a trusted friend within your customer's community is a far more effective way to establish trust. Customers who are converted in this way are also far more likely to make repeat purchases and to refer their friends in turn, which results in them offering a higher customer lifetime value.

Now, let's discuss how to build a successful referral program. There are essentially three steps to setting up a successful referral program. The first step is to treat your customers well. You need to make sure your customers feel positive about their purchase and about their relationship with you as a brand. There are many ways of doing this, such as building trust with your customers by ensuring that you store their data responsibly. Another way is by giving shout-outs to customers who are using your services in creative ways. Acknowledge your customers, and they'll remember it when it comes time to ask for a referral.

The second step is to make it easy to refer you. Make sure that your customers know how to refer their friends or colleagues to you and that they can do so easily. Research shows that over 80% of satisfied customers are more than willing to refer your company, but only a quarter actually do. In most cases, this is simply because customers are unaware of how to do so. You can even directly ask your satisfied customers to mention you on their social media or give them an easy way to invite a friend or relative with a link. Either way, make sure that you acknowledge the role of the community in allowing your business to grow and thank them frequently. One of the most effective ways we have found to make it easy for your customers to refer you, is by using a digital business card.

The third step is to reward your referrers. Rewards for referrals are the high mark of a well-developed marketing program and can take your referral marketing to the next level. However, offering a straight money reward for successful referrals can seem a little tacky since you're essentially bribing your customer to do your outreach marketing for you. You may want to consider offering rewards that are non-monetary and seek to reward organic referrals rather than paying people to construct them for you. These rewards can include gifts, a subscription to a yearly maintenance program, or a cash donation to a charity, just to name a few.

It's also important to measure the success of your referral campaigns. Make sure you are tracking the success of your new referral program so you can tweak it and make it more effective as necessary. There are several metrics that you can use to measure the success of your referral campaign. First is the number of users who are sharing your invites. Another is the actual number of referral page visits that you get on your website. Another important aspect is keeping things secure. When handling sensitive information such as personal and financial customer data, protecting that data must be a priority.

You need to make sure that you use a referral program that comes with a security system to help protect yourself against hackers. This will give you peace of mind that your program has a solid layer of defense against cyber criminals who have unfortunately become an even bigger threat since the pandemic hit.

To provide you with some inspiration, here are three examples of how your home service business could successfully start using referral marketing to increase your leads and generate new customers:

1. Points program: ABC Heating and Cooling Company offers a point-based system where each time a customer refers a friend who purchases something from ABC Heating and Cooling, the referrer will receive 250 points plus a bonus discount on a particular product or service.
2. Credit to future purchases: In this example, both the referrer and the friend will receive a $50 credit to use on future purchases when the friend becomes a new customer of ABC Heating and Cooling.
3. Percentage of the friend's invoice: Whenever the customer refers someone to ABC Heating and Cooling, and that person becomes a new client, the referrer will receive 10% of the new customer's invoice off of their next invoice with ABC Heating and Cooling.

Ultimately, a good referral program will result in more customers, higher revenues, and more referrals. If you'd like help launching a successful referral program for your home service business, be sure to contact us online or give us a call to learn more. We have a lot of experience when it comes to referral programs and have helped many of our clients start programs just like the ones we've mentioned today.

In closing, remember these key points:

1. Treat your customers well, so they want to refer you.
2. Make it easy for them to refer you with step-by-step instructions and short URL to your digital card.
3. Provide a relevant incentive to encourage referrals.
4. Track the success of referrals and adapt accordingly.
5. Protect your customers' data.

Referral marketing can be a game-changer for your home service business. By implementing these tips and examples, you can quickly build a base of brand awareness and community trust. Don't be afraid to ask your satisfied customers for referrals, and make sure to reward them for their efforts. With a well-developed referral program, you can generate a significant amount of leads and grow your business.

If you find yourself struggling with creating your referral program, claim your free strategy/coaching session, we are here to help.