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Reboot Your Referral Program

The new year brings new potential to reach new clients.

I get asked all the time where our customers come from. Just like you might, I humblebrag that over 80 percent of our new business comes from warm referrals. Someone liked what we did for them so much they told their friends to come see us. Over 17 years, that amounts to an ever-growing customer base and a ton of referrals.

Also by Henry Clifford: Local as Hell and Other Revelations

We recently sat down and set out our strategic plan for 2020. One of our big goals for the year is to create a lead generation flywheel for ourselves resulting in new 30 consults per week. From there we surmise that we’ll close a good portion of those proposals and ultimately hit our revenue target. What’s been bugging me the last week or so is if over 80 percent of our business is referral driven, what are we doing to incentivize more referrals? We currently have a referral program where the referrer and referee get a $100 gift card. We also incentivize our own employees to refer in new business opportunities, but those are mostly classified as on-site upsells. True referrals come from happy customers who get a kick out of knowing their friends will have a great experience that will reflect well on them. If referring someone to us (or anyone) is a fundamentally selfish act, what can we do to amplify the behavior? What incentives are at work here? As with most things in life, there are myriad motivators:

Money: If we offer a $100 gift card to the referrer and referee, that’s going to come across as a nice gesture, but it’s not enough to incentivize abnormal behavior. Those referrals were going to happen anyway and they’re not because of the $100. Will the next one come along quicker because they remember the $100 the last time? Maybe, but it’s not enough to really move the needle.

Recognition: This is a big motivator for a lot of people. When we single each other out for public praise, it’s an opportunity for both parties to feel good. We give away a Sonos One each month to one of our referring customers drawn at random. At the end of the day, this one’s still not enough to ignite big referral growth.

Asking For The Business: I’ve had a hard time with this one. As much as I might claim to be a talented salesman, asking our clients for referrals at the end of a project makes me feel like a multi-level marketer. I’ve always figured that if they run into friends and our name happens to come up, things will take care of themselves. I admit that my current “hold breath and pray” method is a little flawed. I’m going to use 2020 as an experiment and will ask for referrals after every system we commission. This might be the one least comfortable and most productive thing we can do this year to increase our sales funnel.

What are you doing to incentivize and reward referrals in your business?

Stay frosty, and see you in the field.