Picture your potential customer hunting for a product or service, where are they most likely to look?

Besides the internet, people often turn to their family, friends, and colleagues. If you have provided excellent service, your customers will be happy to refer your product or service to their friends, family, and colleagues.

Referrals are essentially word of mouth marketing that is very powerful and effective. When a potential customer hears how great your business is from a raving fan, it carries more weight and credibility than when you tell them the same thing. Referrals from a trusted source have a high level of confidence. 92% of consumers trust recommendations from friends and family above all other advertising forms (Source: Nielsen Global Media). Additionally, nearly 95% of shoppers read online reviews before making a purchase (Source: Spiegel Research Center). New businesses frequently get their foothold with new clients, with 20-50% of their sales coming from referral business. (Source: McKinsey & Company).

Because referrals build on existing relationships with your most loyal customers, referrals foster even deeper loyalty. Since referral marketing has a lower customer acquisition cost (CAC) than most marketing, you can increase your revenue by building on your existing customer base. From dentists and doctors to clothing and consulting services, referral programs can bring in a steady stream of new customers.

Getting your best customers to remember to spread the word to qualified customers requires a systemized approach. This approach must always encourage and remind customers that providing referrals is not just the right thing to do but the expected thing to do. A referral program can serve as a reminder to guarantee results. Following these steps will set you on the right path:

1. 1. Set sales targets for how many referrals you would like to achieve each month
2. 2. Determine where your referral sources are originating
3. 3. Identify all potential referral sources
4. 4. Specify your ideal client and make it clear to your referrals
5. 5. Choose appropriate channels to host your referral program
6. 6. Select your referral rewards and always say thank you
7. 7. Create messaging, notifications, and resources for your customers
8. 8. Create a follow-up plan for your referrals

Sales Targets

Do you want your referral program to bring in new customers/revenue? If so, how many and how much? Or do you want your referral program to increase customer loyalty? Each requires a specific approach.

Dropbox's referral program offered an extra 500 MB of free storage to the referral and the new customer. The result? A whopping increase in membership by 60% in 2010. (Source: infinitive). Uber assigns personalized referral codes (Source: Uber) and rewards both the new and existing customer with a free trip when the new account is activated.

Referral Sources

A referral source system that builds into your marketing funnel from the onset enables you or your sales team to have a history of where the referral originated and track and reward the referring customer.

Evernote's referral program rewards existing customers with points that can be redeemed for premium features and gives additional points if referrals upgrade to Evernote Premium. (Source: Evernote).

Potential Referral Sources

Referrals don't just have to come from existing customers. They can come from vendors, former customers, or leads from LinkedIn or other social media. Anyone you have a contact within the present, past, or future could be a potential referral source.

Your Ideal Client

Before your customers go out and do the leg work for finding you referrals, make sure they know who to refer. Have a clear description of your ideal client front and center on your referral program so that they can send you qualified leads or customers.

Verafin, a fraud detection and anti-money laundering software company, included a "Referral Certification" to educate customers on Verafin's ideal referral client in their month-long contest. The results? 117 quality referrals. (Source: influitive).

Choosing Appropriate Channels

To make your referral program perform, you need to choose an appropriate channel to notify your customer and your business when a referral is captured. Facebook, WhatsApp, Facebook Messenger, WeChat, and numerous other social media channels have a referral landing page with pre-populated messages that include the offer, a referral link, and the company's social media ID or tag – to monitor messages. Social media is an excellent channel for impulse behavior. Most people use at least one of the channels to stay in touch with friends, kill time, look for entertaining content or catch up on the news. Because they're there for fun, it's easier for people to act on impulse.

Referral Rewards

The best referral programs do one of two things; offer cash incentives or non-cash incentives.

1. 1. Air BnB's Travel Credit program offers cash incentives by providing an Air BnB coupon towards the next qualifying reservation.
2. 2. Tesla offers non-cash incentives for something money can't buy. Tesla gifts a referral prize with a 'one of a kind", Powerwell 2 battery for the first person to refer 20 people in their region.

Different people respond to additional incentives. It's essential to put some thought into what would motivate your existing and potential customers to send referrals your way.

Create Messaging and Resources

Once you've created your referral program, it's time to generate newsletters, blogs, product updates, and emails for each of your referral contacts that explain your referral program. These resources should link to your landing pages and workflow for your sales funnels. Like all effective sales funnels, personalization and persistence are key.

Follow Up

When your referrals send you a lead or customer, be sure you have an efficient automated sales process in place that allows you to follow up with them immediately and say thank you. If you don't, there's a good chance your competition will. The sooner you get back to your referrals, the better your chance of converting them into your customer. In addition to incentives, do remember to thank your referral source, they'll appreciate it. And if you don’t, they’ll notice it and probably not send anymore referrals your way.

Have a look at your customer base; chances are you have many happy customers who would be thrilled to refer business to you, especially with attractive incentives. All you need to do is make the first move by creating a referral culture. BRENT comes to the rescue with its integrated, high conversion, autopilot marketing system that utilizes a systemized, digital referral approach. BRENT's referral system reinforces and ingrains a referral culture with your clients.

Would you like to discuss how BRENT’s referral system can create your business’ profitable referral culture? Reach out for a no cost, no obligation consultation at