Modern businesses work in an extremely competitive environment. They have to face sturdy rivals in both the online and offline markets. Yes, advertisements do have a positive effect on creating a brand image. Even online ads can influence a customer and make him or her trust your products referral programs have their unique impact on undecided customers.

But referral programs have their unique impact on undecided customers. Small and medium companies benefit a lot from opinions and recommendations. With the help of high quality, strong impact referral business enterprises can attract a prized customer. 

A referral program has to be planned and executed with care. You have to take a long-term approach and cover all the angles. A lot of effort and thought goes into generating quality referrals. Such referrals need not always happen in a planned manner to create customer touchpoints.

The referral business can surprise even the most experienced professional. You never know when and where someone recommends a product or service to friends. But experts say that you can always plant an idea into the customer’s head so that he feels the need to make a referral.

Types Of Referrals

Direct Referrals

This style is a quid pro quo approach that usually works with most of the customers. You offer him, say, small favor, in exchange for making a direct referral. An online cosmetic store can offer the customer a complimentary gift in exchange for referring its latest products to a friend or neighbor. 

A handyman service can offer a free fix in exchange for referring to its new remodeling service. These direct referrals have a motivating rather than an obligatory effect. The satisfied customer may take the initiative and make more referrals of his own accord.

Tangible Goods

In the referral programs, nothing creates more impact than a tangible gift. You can put in a small gift voucher or certificate in the hands of a customer. All they have to do is share this tangible prize with their friends. This tactic will create a meaningful referral without costing the company much. 

Since this approach only has low exposure, companies usually use it only twice or thrice a year. The customers or employees who bring in more business get rewarded further. Some businesses also try out “bring your friend for free” or “a gift for your friend,” tactics to good effect.

Implied Referrals

This style is a proactive approach that is underutilized by some companies. In the implied approach, you do not make things explicit or obvious. You do certain activities so that the customer’s friends and neighbors catch on. They will get interested and make additional inquiries about doing business with you.

While offering a service, you can send out free ‘no parking’ signs with your company logo for your customers to hang out in their gates. You can display a project, template, or simulation to attract more business.

Community References

In the referral programs, community outreach can be very useful. Your business can work with a local non-profit organization or charity. Together you can promote an event, mission, or program that benefits the locals. This approach will give you a better reach for your products. Those who are in favor of that charity or service would promote your product along with the event.

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