When it comes to finding new clients, many agencies rely on cold calls and emails. This sort of client acquisition can be successful in netting you projects, but it’s certainly not a long-term solution for building a thriving agency business. An even more successful approach is to encourage current and past clients to refer new business your way. A customer referral program can help you achieve this goal and provide you with a list of “warm” contacts whom are more likely to convert into real customers.
When you contact a prospective client via someone they know to be happy with your services, your chances of getting hired improve. Also, since most referral programs include some form of an incentive, your customers feel rewarded for recommending you. It’s a win-win!
Here are a few steps to get you started with your customer referral program.
Step #1: Choose Rewards and Incentives
The rewards or incentives in a customer referral program are its most important element. To run a successful customer referral program, you need to choose a reward for clients that recommend your services and successfully net you a new client. This incentive should be exciting enough to encourage your existing customers to go out of their way to find you new clients. If they don’t find the reward “rewarding” enough, they might not feel inspired to recommend you, despite the level of service you provide.
When Software Advice ran a survey to find the most effective tactics to generate referral business, they found that more than half the respondents were “somewhat more likely” to refer a friend or colleague if they were offered a direct incentive, social recognition, or access to an exclusive loyalty program.
Implementing a direct incentive program could be as simple as the following options:
- Offer a flat discount on their next project
- Offer X% commission on the first project of their referral
- Offer complimentary credit they can use on their next project
If you can’t zero in on an incentive, email your clients and ask them what they’d prefer. Or, simply ask for incentive ideas. Ask them how you could get them to recommend your agency to their connections.
Step #2: Email Your Customers
Once you’ve decided upon the incentive you want to offer, your next step is to email your clients about your referral program.
You should state two things clearly in your referral email:
- Explain how your referral program works and what the different incentives are.
- Include a description about the ideal person who might be interested in your service (talking about your target audience is important because it helps your current customers in identifying the people in their connections who’d make qualified leads). For example, include a sentence like “If you know someone who runs a 6-figure business and could need help with advertising and PR, please introduce us to them,” in your email.
When you write this email copy, don’t try to oversell the referral program because the people who are happy with your services will be happy to recommend you with just a little nudge.
I don’t know if I’ve mentioned it before, but I’ve been working with [salesperson] for a few months. The other day, I was talking with him about some of the things that he and I have done, and I realized that I should put you two together. So…
[Referral], meet [Salesperson, with a LinkedIn profile URL].
[Salesperson], meet [Referral, with a LinkedIn profile URL].
Can I leave the rest to you guys?
Talk to you both later.”
Step #3: Choose a Tracking Mechanism
Hopefully, since you’ll be emailing many clients, you will receive an influx of potential leads. To make sure that you do the payouts correctly for all the leads that convert, you need a solid tracking system.
Once you notice that a client’s referral has converted, thank the client with a short email along with listing any steps that the client must take to redeem the incentive.
When done right, a referral program can bring in a lot of qualified leads for your agency. The above three steps are enough to setup a basic client referral program. When you’re done with launching it, you can promote it on your blog, social media accounts, and email newsletters – and let the leads roll in! Be sure to track how it performs over time – if the incentive you’ve chosen doesn’t entice your customers, it might be worth revisiting. In addition, if some clients don’t have a referral immediately, make a note to follow up with them in 6-12 months.
How do you ask your customers for referrals?