Rewarding Existing Customers - How?

[NickPT]

I need some advice regarding a referral scheme for my business venture.

I am starting a nutritional consultancy this summer. Most other consultants do little marketing for growth and rely almost exclusively on word-of-mouth to gain new clients.

If I am lucky I will manage to sell a lengthy first consultation followed by 2-4 follow-up sessions (roughly £100 turnover per client) but I really need an awesome referral scheme to keep momentum going.

I am a bit clueless and can't think of a good idea... can anyone help?

How do you reward your existing customers if they create new customers for you, and do you actively encourage it?

Thanks in advance

 

[gary brown]

Contact Steve Gibson, he is really good at this, tell him I recommended you.

Gary Brown

 

[MichaelAngelo]

Ok im going to start you off give them an incentive to refer someone

What are they going to get?
Why Should they refer somebody else?

Michael www.Map-Traffic.com

 

[fastfences]

Hi Nick,
Give great service that achieves outstanding results and you'll receive your referrals without cost. It takes a little while, but then so does any form of business promotion.
Cheers, Nigel

 

[Cornish Steve]

Hi Nick,
Give great service that achieves outstanding results and you'll receive your referrals without cost. It takes a little while, but then so does any form of business promotion.
Cheers, Nigel

Agreed. Do such an outstanding job of exceeding your customers' expectations that they just can't wait to tell others about you. Doesn't cost a thing, it's genuine, and it's the best marketing strategy there is.

 

[directmarketingadvice]

Contact Steve Gibson, he is really good at this

Thanks, Gary.

Give great service that achieves outstanding results and you'll receive your referrals without cost.

You've got to be referable. That's step one. Without that, you're not going to get referrals.

That's what I'd call "natural referrals". You do a good job and, through hte ordinary process of life, your client mentions it to somebody who decides to contact you.

And, that’s where most businesses stop.

However, if a business is getting a load of referrals "naturally", they could probably massively increase their referral rate by implementing a well thought out referral system or systems.

As for using rewards, if this is done intelligently, it can be very effective.

I’ll give you an example, and I’m sure you’ll understand what I mean:

Imagine you used an estate agent that did a really great job.

A few months later, a friend of yours tells you he's decided to move house.

Of course, you recommend he use your estate agent.

A couple of weeks later, out of the blue, you receive a bottle of champagne with a note from your estate agent thanking you for sending your friend to him.

For the next few weeks, you’ll probably tell 20 people you know that:

"I have a really good estate agent so I told John he should use him. Then, out of the blue, the estate agent sent me a bottle of champagne to thank me for sending him business!"

Now, 20 people now know that you know a really good estate agent.

And some of them will probably ask you his name when they next decide to move home.

So, that bottle of champagne was a smart investment.

Now, he could have been a “natural referral" business and not rewarded you.

You would have probably still have given him future referrals just because you believe he’ll do a good job for your friends, but would you really have told as many people?

If you’re like the vast majority of people, the answer is “no.”

Understanding referrals, how they happen and how you can increase them, is one of the biggest (low-cost) growth opportunities for most businesses.

Steve

 

[FunkyBears]

Excellent Post Steve!
Wow them with excellent personalised service
Delight them with the experience arround your product.
Thank them for their business
Suprise them with a freebie
Personalise your communication with them
Treat them like friends
Make them Smile
Engage and entertain
Speak to them about them
Ask them for referrals
Make it easy for them to refer you
Reward them for referrals

These days mosts businesses don't have show enough empathy
to their customers it's all seems to cold and calculated.
Personalisation and sincerity are lacking in the equation.
I put a sign on a till in one of my retail outlets in a tourist resort
Get to know thy customer! and if I walked into the shop and saw
a customer leave I would always ask the staff member where the customer came from if they couldn't answer me I would be very dissapointed. A retail customer on holiday has been responsible for generating over £5000 of new business in just over a year and a great deal of our business from the Hotel Industry ( they use our Bears as promotional products that also generate profit) has come from referrals

 

[Cornish Steve]

A couple of weeks later, out of the blue, you receive a bottle of champagne with a note from your estate agent thanking you for sending your friend to him.

For details of the information systems needed to do this, read "Hug your customers". The author of the book relies totally on such an approach.

Steve, I don't see this as a formal referral process, though. It's not as if the estate agent handed out cards or posted a notice offering a percentage reward for referrals. In that case, there's a contradiction: The customer is encouraged to recommend even if he feels the service wasn't particularly good. In the example you quote, which is more of a formalised 'thank you' scheme, everything is in alignment: The customer is delighted, the customer is thanked for doing something spontaneous, and there are no contradictions.

 

[directmarketingadvice]

Hi Steve

As I would define it, the estate agent example would be part of a "referral system" as, while part of it is good mannered appreciation, part of it is to encourage further word of mouth business.

(plus increased client loyalty)

And, if I were the Estate Agent, I'd make it a "formal process", by making sure I knew where every new client came from so, whenever it was a referral, the card and bottle goes out to the source.

I wouldn't even have to think about it, it would be automatic (i.e. systematic).

So, even though it doesn't seem to be "marketing" or "referral generation", it's an investment to bring in future clients, just like an advert is.

It's not as if the estate agent handed out cards or posted a notice offering a percentage reward for referrals. In that case, there's a contradiction: The customer is encouraged to recommend even if he feels the service wasn't particularly good.

I'm not sure if I'd call that "a contradiction". I'd probably call it "a waste of time".

I wouldn't give a referral to anyone unless they do a good job and I don't care how much they offer me. I care about my family, friends, clients, business associates etc. and I wouldn't stiff them just to make a buck.

And I think most people are that way.

That's why the "excellent client experience" is fundamental.

But, if the client experience is excellent, incentives, used properly, can make a huge difference.

For example, back in the 90's, when I was learning marketing from Jay Abraham, there was an IFA at a seminar who had introduced an incentive scheme for his clients.

This produced 240 new clients in 4 months.

He went back to one of his clients and asked "you've been happy with our service for years, how come you've suddenly sent us all these referrals?"

The client said "I'm a really busy guy, but now you're paying me".

(I'm paraphrasing, but it's the gist)

I don't see any contradiction there. If that client didn't rate the IFA, he would have simply ignored the offer.

Obviously a number of clients did rate the IFA and were suddenly motivated to search their minds for people that could benefit from his services.

However, incentives like that have to be done thoughtfully. This IFA knew how to frame it correctly, so he got a good result (about £60k in added fees).

If he had done it the wrong way, it could easily have backfired.

So, I think there's a place for incentives (though not always), rewards (at least a "thank you") and for asking for referrals.

But there's no "one size fits all" and knowing how and when the different factors should be used is very important.

Steve

 

[directmarketingadvice]

Excellent Post Steve!

Thanks.

I love referrals.

Of all the different ways businesses can boost their sales, implementing referral systems is probably the easiest, cheapest and most predictable way to get significant growth in a very short time.

Steve

 

[Cornish Steve]

I wouldn't give a referral to anyone unless they do a good job and I don't care how much they offer me. I care about my family, friends, clients, business associates etc. and I wouldn't stiff them just to make a buck.

And I think most people are that way.

I agree. Maybe this is what irked me about the referrals thread last week. Someone was asking for a percentage to make referrals when they know squat about the business. I'll refer a quality business to someone for free, as a genuine favour, but I won't refer a business that is not quality no matter how much I'm paid. By definition, if I've never used a company's product or services, I can't vouch for their quality. Referrals should be an expression of genuine affirmation, not just a way to make money.