Affiliate Marketing Marketing

How to Increase Referrals for Your Small Business

Image courtesy of FreePik

Referrals are a powerful marketing tool for small businesses. Compared to other marketing channels, it is low-cost and provides better quality leads. According to a survey, 92% of customers in the USA trust referrals from people they know. Hence, if one of your customers talks about your business to their friends, they are likely to become your customer, too!

Along with all the benefits referral provides, it comes with its set of challenges. In this article, Voila Media Group lists the various components your small business needs to launch a successful referral program.

Create a Referral Plan

Just like any other business project, you need a plan for your referral program. Your plan should include the program’s eligibility, duration, incentive structure, and execution. You may need to allot some marketing budget towards promoting this offer online and offline. Additionally, everyone in your team needs to be aware of the intricacies of the program.

One of the common reasons for failure among referral programs is improper management and planning. To overcome this barrier, regularly track the program’s progress, get customer feedback, and be flexible in experimenting till you find the right balance.

Aim for Exceptional Customer Service

Your work doesn’t end when you have made a sale. If you want your customers to tell others about how amazing your product and service are, you first need to make them realize that.

Constantly be in contact with the customer post-sale, through emails, SMS, app notifications, etc. providing them offers and assistance. Additionally, make responding to customer queries a priority.

It is common for queries to be asked on social platforms such as Twitter and Instagram. Respond to these queries promptly and respectfully to create goodwill with your customers and build a trustworthy brand image online.

Go over and above to cater to your customer’s needs. Whether it be taking the initiative to pay for express delivery yourself, working on the weekend to complete an urgent request, or making time to attend client events. Think of the long term and how each of these actions can reward you with a loyal customer and numerous referrals.

Providing Incentive is Key

Did you know Paypal started a dual incentive referral program to get their product off the ground? The customer and the person referred received $20 to register on Paypal. Similar strategies have been followed by other prominent brands such as Tesla, Airbnb, T-Mobile, and more.

Yes, a customer has purchased a product from you, but when you ask them to refer, a common reaction is – What’s in it for me?

Providing an incentive on referrals increases the odds that a customer will do it. You can choose to give a common incentive for all or create a tier system with increasing rewards based on the number of referrals.

Depending on your business, choose the appropriate incentive, which can include:

  • Gift cards
  • Vouchers
  • In-store Credits
  • Special Discounts

Make the Process Easy

A simple referral process will lead to more referrals. You can have a referral tab on your website, using which customers can refer their friends in one simple click. Recognize your active customers and utilize app notifications, website pop-ups, and more to remind them of the rewards they can earn through your referral program.

Similarly in-store, instruct your team to hand out promotional materials such as cards, flyers, and coupons to customers with their purchase. These can simply be passed on to their friends and secure you a new customer.

Refer to Get Referred

Make it a habit to refer fellow businesses to your customers as this will lead to others doing the same for you. Moreover, you will also create a healthy network of connections through which you can grow your customer base.

Additionally, utilize existing online business referral platforms or join networking groups in your area. Creating a Business-to-Business (B2B) referral pipeline can be a great addition to your Business-to-Customer (B2C) efforts.

To launch a successful referral program, your best bet is to focus on constantly engaging with your customers, providing incentives based on their preferences, and having a streamlined method to make referrals.

About the author


Hannah Simpson

Hannah Simpson is a stay-at-home mom and has a passion for DIY crafting. She enjoys writing and helping people with disabilities find their passion.