Just like reducing recruitment costs, understanding how to efficiently reward referrals is an essential element of any business operation. Whether the business is large or small, referrals form a large portion of how new leads are generated. But how should those referrals be rewarded?
Here are ten of the best ways to reward those who help spread your company’s word.
1. Discounts
One of the most common ways of rewarding referrals is through the offer of discounts. Everyone loves to get money off for referrals, and it’s the simplest way of rewarding them. For example, a referral may result in a 10% discount on the next purchase, using an appropriate code at check-out. Simple, effective, always reliable, a basic discount should be your first port of call when it comes to establishing rewards for referrals.
2. Vouchers
Businesses that are able to strike up a deal with other businesses can use vouchers as an appealing reward for referrals. The vouchers can be for anything, ranging from a free coffee to money off a grocery shop. If possible, try and tie the reward to the theme of your business, and the products or services that you offer. These vouchers can be used either in your store or in stores that you’re able to negotiate cross-branding deals with.
3. Experiences
As a tangible and memorable reward, think about offering “experience days” for those who are able to achieve a certain amount of referrals. It can be anything from driving to performance cars to a relaxing spa getaway – if a person has become a powerful referrer it pays to reward them with something that shows some more imagination. If you can tailor the experiences you offer to your brand, that will help solidify a positive association.
4. Tiered Rewards
Introducing several tiers to your referral reward scheme is a great way to ensure that people keep referring on an ongoing basis. For example, you might have it so that you have a base percentage discount that rises by 5% for every consecutive referral, up to say a one-off 50% off an order. This will help to encourage long-term, ongoing referrals. It shows a referrer that you acknowledge their importance and the importance of their ongoing referrals.
5. Larger Initial Referral
In order to make sure that the initial referral takes place, you may consider offering a higher discount for the initial referral followed by a smaller discount for subsequent referrals. For example, a 15% discount at their next checkout for a first referral, followed by a 5% discount for each referral thereafter, to act as a more appealing first reward. Once that initial referral has been made, you’ll be able to wow with your quality of service.
6. Dual-incentives
Many referral schemes only seek to reward the referrer, but ignore the lead. As the referrer is likely to know the lead and ask them about their experience, it makes sense to offer a benefit to the lead as well – for example, a discount on their first order. This will also in turn further encourage them to refer your business themselves, which ensures that your referral program is self-sustaining on a long-term basis.
7. Charity Donations
If you want to ensure a positive image for your business, consider making a donation in exchange for referrals. A referral might, for example, result in a $10 donation to a local cause or charity. For further engagement, you may even offer a selection of local/national charities or causes, and allow referrers to choose their preference. This is an excellent way for you to show the social conscience of your business, and support causes close to your heart.
8. Prize Pool
Another way of looking at referral rewards is to offer a single larger prize, rather than smaller individual rewards for each individual referral. So a referral could be rewarded by an entry into a prize draw for something larger, and of a higher overall value. This could be anything from something you sell to a holiday for two. If you have a larger number of referrals, this can actually be a more affordable reward system than individual rewards.
9. Free Gifts
Everyone loves to receive a gift, and it helps to offer customers something tangible as a reward for referring new leads your way. A range of items can constitute free gifts – anything from a simple branded pen, to branded clothing, even home accessories and lifestyle items. Cater your rewards to the scale of the referrals, for maximum efficiency – a free pen for a first reference is much more appropriate than a coffee maker, for example.
10. VIP Access
Make your referrers feel a part of something special, they’re your star customers after all. You can do this by making them a part of a special VIP section of your website. There they can get access to other rewards from the list, such as prize entries, or they can enjoy other benefits such as free shipping. You could also provide them with early news about upcoming products or business developments, so they feel in the loop of your business.
Making Your Choice
Every business has a different approach to referrals, and this is your opportunity to personalise yours. Tailor your reward system to your brand ethos, your products, and your services. The biggest businesses in the world understand the power of developing a community – properly rewarding referrals is a great way to establish one.
For some more tips on building sales funnels and referral programs check out these recent Marketing.com.au articles:
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