Give an Incentive for People to Refer Your Business

By Kelli C. Holmes

Providing good customer service is not enough of a reason for people to refer your business to others.  People are more likely to talk about your business when they are unhappy with your product or service than when they are happy with it!  Therefore, you should develop an incentive plan to give people a reason to refer your business to others. In establishing an incentive plan for people to refer your business these are some important elements to consider:

* Be consistent and reward referral sources equally. 
* Determine the potential cost of the program in advance and plan appropriately. 
* Decide if you will be rewarding A). all referrals B). referrals that purchase only, or
* Referrals that purchase above a certain amount (you might consider a three tiered incentive program as well). 
* Select what the incentive will be.  A gift?  Recognition?  A gift certificate?  A percentage or dollar amount off their next purchase?  Or plain ol’ cash?

You will also want to determine when and how the incentive is given.  Adding special touches such as unique wrapping or a handmade card makes an even greater impression.  A unique example is a custom gift certificate chocolate bar wrapped in gold given to appreciative clients, they not only get to spend their reward they get to eat it as well!  You can also continue to reinforce your relationships by sending a personal note or inspirational message to your referral sources as well.

There are also other less tangible ways to recognize the people who refer business to you.  Recognizing them publicly by posting their name and thanking them, or doing the same in your newsletter works nicely.  Or establish a section of your newsletter that thanks them and shares what they received as a result of referring you.  This can be very effective.

Be sure to track and follow up on your referrals.  Share with the source who referred you what is happening with their referral, tell them what you plan to do next and keep them informed.  They will appreciate knowing how well you are taking care of the person they sent to you.

The most successful incentive plans to get people to refer you are generally special and memorable, leaving an impression upon the source so that they will be inspired to continue referring your business to the people in their lives.  Using an effective incentive plan will help you do better and smarter business.