Even the best referral program can run into some issues along the way. Here are some common problems and how to address them:
1. No one is using the program. If you’re not getting any referrals, you either haven’t created a strong enough rewards program, or people don’t know about it. If you think the issue is with promotions, start mentioning your referral program at every opportunity. Add it to your regular mailing, mention it to all your customers, and consider doing a separate mailing to promote your program.
2. The referrals you receive aren’t interested. If you’re getting plenty of referrals but they’re not becoming customers, that means you need to increase the quality of the referrals you’re receiving. Make sure you let your customers know you’re rewarding based on qualified leads. You can also ask a qualifying question on the referral form to make sure your customers are thinking in the right direction. For instance, if you sell cosmetics, you could ask your current customers to list the product lines their friend currently uses. This simple question will make your customer think twice about writing down anyone and everyone, without regard to whether they fit your ideal customer.
3. You’re getting too many referrals. This shouldn’t be a problem unless the referrals you’re receiving aren’t qualified. Otherwise, most people wish they could be in your shoes – so overrun with business that you’re wondering how to turn off the flow.
4. Your program is too expensive. If it seems like you’re spending more money on referral rewards than they’re worth, there’s either a problem with your perception, or you’ve stacked the rewards too high. Most businesspeople know how much a new customer is worth to them in terms of business over the next year or years. Compare that amount to the amount you’re paying to your referrer. If each new customer is worth about $50 in new business over the next year, you don’t want to offer more than that as a referral bonus. If you are offering $100 credit for each new customer referred, no wonder it seems expensive – it is! Adjust accordingly.
5. Your program is taking too long to administer. If you’re spending hours each week administering your program, you need to simplify and automate. Create systems to help you track and reward your members, and streamline your process so it can operate quickly and easily. Cut out extra steps, get rid of things like punch cards and by-hand tracking, and make it all digital if possible. If that is too complex for you, a single index card with names and numbers of referred clients can work, too. Pick something that fits your style and remember that simple is best.
If you’d like help setting up a system for your referral program, call us…we can help!