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John Jantsch

4 Types of Referral Programs Every Business Needs

Tuesday, September 17, 2013

I get asked to talk about referrals quite often – in fact, I’ll be doing Referral Engine presentations with two distinctly different audiences this week.

One of the things I always feel the need to emphasize is that referral generation is something that should be baked into pretty much every angle possible. It’s not something that do one time or one way.

You need to keep your referral generation efforts front and center and build many and varied touchpoints along the customer referral journey.

Referrals often happen when they happen and, while you can’t always control when one friend asks another for a referral, you can influence how often your referral sources think about referring your business.

I usually suggest that every business build multiple referral programs and offers in each of the following four types.

Direct referrals

A direct referral program is the type where you simply state to your existing clients an offer for the act of creating a referral that turns into a client. Refer a neighbor to our remodeling service and we’ll give you the use of a carpenter for a day to fix those nagging projects around the home. This is an approach that is both motivating and connected to what the business does.

Implied referrals

This type of referral is terribly underutilized. In an implied referral program you want to do things that make it very obvious you are doing work for someone, without necessarily asking for referral. This sets up a situation where a friend or neighbor might simply ask you to refer the person running an implied referral program. So in this case, my remodeling contractor might send a series of letters to neighbors around a project home informing neighbors to call if there are any issues. Or, they might create a professional looking completed project book using a tool like Blurb.com so that visitors to the home get to see what essentially amounts to a brochure sitting on their coffee table.

Tangible referrals

With a tangible referral you put something in the hands of your customer that has real value and that they can give to a referral source. The thing I like about this tactic is that you can run it three or four times a year as a low cost, low exposure way to keep referrals top of mind. Once a quarter or so you send out a $100 gift certificate to your best customers and ask them to share the gift with a friend. It makes the act of referring simple and tangible and you can always reward your client when those gift certificates turn into customers. I also love “bring a friend for free” or “give a friend a free product” approaches to this one.

Community referrals

There are so many community organizations that need and deserve your support. When you partner with a non profit player and support their mission, events and needs you can also offer promotional support by running the occasional promotion that benefits your partner. When you buy this week or sign a contract this week 10% of the proceeds go to benefit our community partner. Your partner benefits from whatever sales occur and they are certainly motivated to talk about and refer your organization to their constituents.

The beauty of taking this kind of multipronged approach is that you can build one program and then simply keep adding them until you have referrals coming from numerous sources while promoting your referability non stop.

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About the Author:
John Jantsch is a marketing consultant, award winning social media publisher and author Duct Tape Marketing and The Referral Engine. He is the creator of the Duct Tape Marketing System and Duct Tape Marketing Consultant Network that trains and licenses small business marketing consultants around the world.
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