As a small business owner, you know the value of word of mouth. It’s a key marketing strategy, and for good reason. According to a recent study, 84% of consumers trust online reviews as much as a personal review by a family member or friend.

But what does it take to get your customers to post a review or mention your company in face-to-face conversation? One practical method is to design a customer referral program. Offering incentives gives customers a clear reason to refer others to your small business, which is something they may not otherwise think or have reason to do.

Creating a referral program is an organic way to grow your client base while rewarding your current or past–and presumably happy–customers.  It doesn’t have to be complicated. In fact, setting up a simple system will bring in new customers and give your existing clients a reason to stay. 

  1. Set Goals
    What results do you want to see from a referral program? Be specific, whether it’s getting five new clients or hitting a record-breaking sales month. Setting goals now will help determine the success of the program later.
  2. Choose the Incentive
    How will you be rewarding customers who refer new customers to your company? Will they receive a discount, a free service, or a tangible product? A local pediatric dentist might offer a Starbucks gift card for referring new patients, while a plumbing company may waive the next service fee. Regardless of what you choose for the incentive, make sure it aligns well with your brand and will motivate your customers to refer friends and family to your business.
  3. Create a Communication Strategy
    How will you let your customers know about the referral program? Creating a clear call to action for your customers will give them the information they need to act. Add a tagline to your invoice, train your employees to remind customers face-to-face and over the phone, and widen your reach by utilizing social media channels.
  4. Analyze the Results
    A referral program is only as good as the results. If you’re not meeting your goals for the referral program, take the chance to reevaluate. Do you need to change the incentive or communication plan? Small tweaks can make all the difference.

Word of mouth may be king, but incorporating a referral program can help take your business to the next level.