To encourage personal recommendations, many businesses now have formal structures in place to reward customer referrals – such as exclusive offers, customer loyalty points, events and hospitality days.
How can you implement a successful referral programme?
1. Do your research
By knowing what’s going on around you, you can gain a natural advantage.
Ask yourself: Are others in your industry offering a similar scheme for their customers? Is yours the first? How is your offer better than your competitors? What do your customers think of your service?
Being prepared makes it much easier for your business to stand out.
2. Keep it simple
Nothing is clearer than black and white. And that’s the frame of mind you want to approach a referral scheme with.
A simple process of rewarding customers for their valued referrals is as complex as it should get – keep percentages and margins clear and make sure that everyone knows where they stand from the outset.
3. The reward
Percentage earnings are a great way of bringing flexible rewards for customers. The bigger the sale, the higher percentage of the new deal value they will receive.
This will not only keep them happy, but encourage greater rewards for high asset customers.
4. Good communications
Referrals and word of mouth recommendations are built on good communication; so make sure that referral partners have regular contact from your business and continue to receive excellent customer service.
5. No hidden gotchas
Many schemes do not account for overhead costs and can leave customers with a sour taste in the mouth when they realise they will not receive their full percentage.
Keep hidden gotchas to a minimum, or better still, make sure that they do not disrupt the customer’s entitlement.
Neil Armstrong is director of business services at Timico.
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