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  • Like this BiZ 5:10 pm on August 7, 2012 Permalink | Reply
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    How to develop a great referral program. 


    Developing a great referral program is as easy as connecting the dots:

    Staff Promotion: If your staff doesn’t make people aware that a program is in place – nothing will happen. Most staff find it too awkward to just blatantly ask for a referral – one needs to provide the right tools that make it easy to refer friends.

    Official Referral Program: If it fuzzy – people will not respond. The more official and prominent you make your referral program the more traction it will have. Two offers are required: An Introductory offer – an enticement for a new customer to give you a try, plus a Referral Thank you Reward for the person who referred their friend and brought you new business.

    People will share the news about your great product or service by Word of Mouth (a slow but effective process), Cards (something tangible to pass on the offers), Email (the preferred way when friends don’t live close). Twitter (a fast effective way to spread buzz about a program) Face Book (Posting link to on Wall engages friends to participate) and Web (the ability to register referrals online when viewing website).

    Great Customer Service: The best referral program in the world is no substitute for great service. Great Service is the fuel that will propel a program forward or have it stall in its tracks. 

    The result of having a great referral program is More Business. Referral Marketing is the most cost effective, sustainable and measurable marketing  initiative one could develop. Referred customers spend more, have higher contribution to margin and are more loyal than regular customers. Having a great Referral program is as easy as connecting the dots.

  • Like this BiZ 7:03 pm on April 4, 2012 Permalink | Reply
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    Referrals are to Dine for… 

    An impressive follow-through after enjoying a great dinner…

    Our waiter upon presenting our bill asked if we wanted to take part in their referral program. “Sure” we said. “We love this place”

    He registered our name and email on a portable tablet and presented us with three plastic cards that we could hand out to our friends.

    “If your friends go online and enter the code on that card” the waiter stated, ” They will receive an email with our introductory offer of a free appetizer with their meal. If they come in and dine with us we will send you our thank you reward of a free dessert with your next meal.”

    “Sounds pretty straight forward” I said “We can do that”

    When I got home I noticed that I had received an email from the restaurant with an additional “virtual card” that I could email and Tweet to my friends, plus post on FaceBook if I wanted to. The instructions said that if my friends click on the virtual card link they would get the restaurant introductory offer.

    Saw my friend the next day told him about our amazing meal and gave him a referral card. Told him to follow the instructions on the back of the card, enter the code online and he would receive the introductory offer from the restaurant. I posted the virtual card on my FaceBook page and sent a few emails to my friends.

    From there the program must have gone on autopilot…. I have received multiple referral thank you rewards from the restaurant, each with a free desert offer. It has turned turned me from being just a customer to being an ambassador for them.  Sure is nice getting free deserts at my favorite restaurant…

    This referral program has me sold on how simple and effective it is.

    If you are a business that wants to get serious about growing your referral business – check out

    • musingsofasalesman 3:51 am on April 5, 2012 Permalink | Reply

      Reblogged this on Mukesh Gupta and commented:
      It always feels great when we get some really good service.
      Also, looks like the restaurant has figured out the most important criteria for a successful referral program:
      – Simplicity (The program should be really simple to explain, understand and share with others.
      – Thank and reward your referring customers (It seems really simple and common-sense to do this, but you will be surprised to know how many businesses fail to thank their customers who refer the business to new friends.
      – Keep up the service levels (Once you start getting new customers, businesses thrive and a lot of them fail to keep up their standards. That is when the downward spiral begins).
      Hope airlines learn from this and instead of creating frequent flier programs, start creating referral programs.

  • Like this BiZ 10:36 pm on April 2, 2012 Permalink | Reply
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    The Power of Referrals – How to get – One Million Customers! 

    1 million customers? You got to be kidding me….

    That’s what I thought until I started doing some math…

    OK – so let’s say that you had 20 customers who were passionate about your product or service and you gave them a tool that they could easily introduce and refer 3 of their friends.

    20 x3 = 60 new customers plus the 20 original customers = 80 customers in total

    will call that Level 1

    Note: Referral customers have been shown to be more profitable and loyal than our original clients.  Since they came by a referral – the concept of referring our business to their friends is not new to them.  If we empowered our new customers with the same referral tools plus reward our current clients for their success, we know they all will be motivated to refer three new friends, colleagues or acquaintances.

    So if duplicated the process:

    80 customers get 3 new referrals =240 new customers plus the previous 80 = now 320 clients in total

    will call that Level 2

    If the process continued – how long would it be until we had 1 million customers?

    Level 1:  (20 x 3 = 60) + 20 = 80

    Level 2: (80 x 3 = 240) + 80 = 320

    Level 3: (320 x 3 = 960) + 320 = 1,280

    Level 4: (1,280 x 3 = 3,840) + 1,280 = 5,120

    Level 5: (5,120 x 3 = 15,360) + 5,120 = 20,480

    Level 6: (20,480 x 3 = 61,440) + 20,480 = 81,920

    Level 7: (81,920 x 3 = 245,760) + 81,920 = 327,680

    Level 8: (327,680 x 3 = 983,040) + 327,680 = 1,310,720 customers!

    WOW – so what the math is telling us – If we started with only 20 customers and teach them to get three referrals and then duplicate the process – we would only need to do this 8 times and we would over 1 million customers!

    Now that is phenomenal! That is the power of referrals!

  • Like this BiZ 2:52 pm on March 31, 2012 Permalink | Reply
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    Referrals make cents 

    What does it mean to the bottom line when someone refers a new customer?

    Gus, a well respected butcher in our small town, was sitting down one day trying to figure out what the value of having a new customer would mean in terms of dollars and cents.

    An average customer he figured spends about $40.00 on average every time they visit. They typically come in every week, that’s 52 weeks in a year. So that meant that they would spend $2,040.00 in year. If they were with him for three years that meant they would spend $6,240.00 over that period of time! WOW Gus thought – that really is significant!

    Once Gus started looking at every new customer as worth over $6,000 in business, his attitude changed. He started asking every customer if they knew anyone else that might like his meats. He started giving out introductory incentive coupons that his customers could pass on to their friends. He implemented a reward  program for every referral his customers would bring in. He put up signs and made sure every customer knew the value he placed in referral business. Gus was amazed with the results!

    Not only did business grow dramatically, he found that new customers who came as a result of a referral from a friend spent $5.00 on average more than his previous customers. They showed up each week and sometimes even more! He figured out that referral customers spending $45.00 per week times 52 weeks was $2,340.00 per year  which meant $7,020.00 over three years! Customers that came in from referrals were actually worth over $7,000! Boy that made Gus smile every time a new customer walked in the door!

    Best part was that new customers were very eager to tell their friends and neighbors about Gus’s great meats.  Referral customers truly were the best customers he could wish for. I should have paid more attention to this years ago! Investing in referral customer does make a lot of cents!

  • Like this BiZ 5:27 pm on March 30, 2012 Permalink | Reply
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    Spending too much money trying to get new customers? 

    Businesses in desperation to acquire new customers often land up spending too much money on the wrong tactic. Many confuse traffic building promotions with long term marketing strategies that ensure solid customer growth.

    The hope that if you build traffic – that some will stick and become customers is the rational that many discount coupon companies use to convince businesses to give outrageous discounts combined with paying exorbitant fees to use their services.  Unfortunately, most of these programs attract only bargain shoppers that follow the latest low price offer and develop little or no loyalty to the business. While promotional traffic building venues and introductory offers are not necessarily a bad thing, few offer a sustainable plan for growth.

    So what is the best way to grow a business?

    The answer may surprise you as it is one of the most fundamental and obvious. It has been around for centuries and has been the foundation of most long term enterprises worldwide. The answer is simple  – Exceed customer expectations and then ASK for a REFERRAL.  Having your customers share the value of your product or service with friends, family and colleagues is by far the most cost effective way to acquire high quality customers. Anyone from the “old country” will tell you that. (maybe even smack you upside the head in the process)

    Why does word of mouth work so well?

    There is an excitement that a customer has in a newly acquired product or a well executed service that is contagious. There is an underlying physiological need to justify as well as show off their new purchase. Neighbors will proudly show off their new car in their driveway and rave about its features to anyone who will stop and listen, invitations will be made to have friends or family check out the new TV or furniture set, pictures will be shared to showcase travel excursions and exemplary culinary experiences will be discussed over wine and bread. There is a contagious magical energy that surrounds a new purchase and people love to share it.

    Why doesn’t it land up in more sales? What’s missing?

    As much as the excitement is there, the key ingredient  to focus that energy is often missing. There is no “Call to Action”, no instruction on how best to use that energy, given to the customer. The reasons that referral business doesn’t happen is as follows:

    1) Few businesses instruct their customers on the value they place on referrals. Many just don’t ask.

    2) Companies forget to plant the seed or prompt customers as to who they might know that might that would also enjoy their product or service.

    3) Many patrons have no clue that referrals are the lifeblood of any business and how desperately a company is in need of them to survive.

    4) Businesses often don’t equip their customers with the necessary tools to empower their customers to share their story.

    5) No reward or incentive is offered to motivate someone to act or initiate a referral.

    6) There is no introductory offer or enticement for new customer trial given that could be used to introduce your product or service into a conversation.

    7) Many referral programs are vague and the rewards unclear for customers to feel you are serious about getting referrals. Few companies have made their referral program “Official” with signage and marketing support.
    What additional value do referred customers bring?

    Referred customers are more loyal and profitable than normal customers.

    They have a higher contribution to margin, they spend more and haggle less.

    They have a higher retention rate than customers acquired by any other method.

    Referral programs outperform any other marketing initiative for sustainable growth.

    Tired of spending too much money trying to acquire new customers?

    Perhaps its time to serious about your referral program.

    Ask us how we can help.

  • Like this BiZ 6:44 pm on March 29, 2012 Permalink | Reply
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    5 Secrets to creating a great Referral Program 

    Great referral programs are powerful in their ability to attract new customers. Here are some best practices to keep in mind when designing your own referral program.

    1) Offer great product and great service! OK so this really isn’t part of the referral program, but having the best referral program in the world won’t help you if you don’t WOW your customers and give them something to rave about. Sell only good product and give exceptional service! – this is the foundation to build a great referral business on.

    2) Offer a thank you reward! Do you know how much it costs to get a new customer for your product or service? Marketing, promotion and advertising expenses can be very significant. Sophisticated businesses know to the penny how much it costs to attract a new customer. If someone refers a new customer you just saved a bundle! Offering a thank you reward will encourage them to get more and more new customers for you at a fraction of the cost. Using gift certificates for restaurants or entertainment as a thank you seem to work the best.

      3) Include an introductory offer! As much as the recommendation by a trusted friend holds huge value, sometimes it is just not enough to get people to act. Offering an enticement as a first time buyer will tip the scale to act on your invitation. Empowering your current customer to promote an introductory offer will make them ambassadors for your business. It provides a story to tell and a reason to bring up your company in conversation.

    4) Give your customers something to remember you by! Give them something they won’t lose. People misplace business cards, throw away flyers and promotional material. You need to be creative in giving something that has enough value that people just won’t ditch it. The more it can be a constant reminder to speak up about your product or service the better. Useful items like key chains, memory sticks, bottle openers or funny keepsakes work great but can be expensive. If you are going to use print material, make it as high quality as you can. Plastic credit card sized formats have proven to work the best. People keep them in their wallet and are more hesitant to throw them away.

    5) Get your employees talking about your referral program! Make it official. Have door signs and counter signs that speak to your referral program. Have it on your website and promotional material. Own it and be proud of it. Train your staff to speak of the merits and value you place in referral business. Strong referral business speaks volumes not only as a measurement of success but also to the quality of your product and service in exceeding customer expectations.

    If you are interested in a turn key solution to double your referral business – check us out at

  • Like this BiZ 9:57 pm on March 27, 2012 Permalink | Reply
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    When referral programs fail 

    Just bought a new car and Joe, my salesperson, says; “Peter if you refer a new customer to me who buys a vehicle, I’ll give you $100. We call it a bird-dog fee.”

    It really wasn’t the $100… I really liked the service he gave – so I referred my neighbor Brian to check out cars with Joe…

    OK the $100 did make it interesting … if Brian did buy a car from Joe, I figured that we would share some beer and chicken wings and spend the cash together.

    Next thing I know Brian has a new truck in in his driveway. “Brian, nice truck!

    “Thanks Peter, your friend Joe got me a screaming deal! Great guy, really knows his trucks – Gotta thank you for hooking us up.” says Brian

    So then I’m thinking – this is perfect – Joe owes me a $100 and a BIG thank you – look forward to his call…

    Week goes by… two weeks go by… no call from Joe…

    So I drop by the dealership on my way home from work. Receptionist says “Joe is off tonight” and asks why I was there, did I have a problem with my new car?

    “No” I said “Joe had promised me $100 if I referred someone to him. My neighbor just bought a new truck from him and I thought I would check in on Joe” – She looked at me like I had two heads….

    Now is where the embarrassment started setting in… It wasn’t the money that motivated my referral but Joe had said he was going to give me $100 if I brought him a new customer…

    “I’ll call the sales manager” she offered…. My face was getting redder…

    Sales manager was no help – he knew nothing of Joe’s arrangement and said I should come in when Joe was there.

    It really wasn’t about the $100 … this was getting very awkward… I left saying I would come back some other time…

    Week goes by and I take another chance that Joe might be there… success – I run into him in the parking lot.

    “Joe how you doing? Love my car…. I see my neighbor Brian  bought a new truck from you…” I blurted out.

    “Great to see you Peter….Oh ya… Brian, said he was your neighbor…” says Joe “What a great guy! He plays hockey with Frank, one of my friends. Bought a great truck.”

    “Well you know I was the reason he came in” I started to explain (my face was starting to get red again…) “You had said something about $100 if I sent you a referral?”

    “You got to be kidding me” says Joe “I assumed Frank sent him in and I gave him the $100. Sorry about that buddy…”

    “That’s OK it was never about the money – I sent him in because I liked your service” I was lying now – anxious to get out of this sticky situation…. I was probably beet red by now…. eventually left with my tail between my legs…

    I got home and reflected on the turn of events… my embarrassment turned to anger and frustration… I wish Joe never said anything about the $100, yet he said that almost 90% of his business comes from referrals…

    This one went very wrong… I never went back for service or saw Joe again… I keep telling myself it was never about the $100.

    There has to be someway to design a program that doesn’t trap customers who had good intentions into such an embarrassing situation! Wish they could have a proper official referral program that works.

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