Entrepreneur
Article
By Alyssa Gregory

Using a Client Referral Program to Grow Your Business

By Alyssa Gregory

You know that word of mouth marketing works … most freelancers and small businesses can dramatically grow their client base, simply through casual referrals.

Taking it one step further, structured client referral programs are an excellent way to maximize something you probably already do to some extent in your business — provide excellent service and encourage your existing clients to pass your name onto their colleagues. Here is a look at some of the benefits of client referral programs and some questions you need to consider before you set one up.

What a Client Referral Program Can Do

Aside from helping to get the word out about your services, a client referral program can provide a number of other benefits.

  • Structured referral programs that provide guidelines and examples can make it easy for clients to recommend you.
  • A referral program can provide an incentive that justifies your client’s time and effort spent referring you.
  • A good referral program can give you a quick path to more ideal clients.
  • Referrals, and the thank you’s that should follow, can help you retain your key clients.
  • Ongoing recommendations and introductions can help you grow your business network.
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What You Need to Consider

Research and planning is a good starting point for setting up a client referral program. Along with considering your goals for your program and a format that will work well with your specific clients and services, here are some questions to consider:

  • What constitutes a referral? You may decide that any recommendation warrants some type of reward. Or, you may only consider new, contracted work as completed referrals.
  • What will you offer as incentives or rewards? While you don’t want your referrals to be entirely incentive-focused, offering something of value to clients who recommend you can make it worth their time to speak your praises. You can incentivize with discounts, free products or services, or even something non-business related that your clients would appreciate.
  • How will you track referrals? Tracking who, what and when is key when it comes to referrals that earn rewards.
  • Will you have special, time-based promotions to encourage referrals? There are many ways to engage clients in your referral program, so you’ll want to consider what kind of actions you will take to get the momentum going.
  • What will you do if a client makes a referral that isn’t a good fit for you? Not all referrals are good referrals, and you may receive a referral to a non-ideal client. It’s a good idea to have a plan in advance for handling this type of situation.

As you get your referral program started, it may also be a good idea to start the referral circle from your side by offering referrals and introductions on your clients’ behalf. Assuming your recommendations are genuine, this can be a great way to set the stage for a relationship of reciprocal referrals.

Your Turn

There are many ways to set up client referral programs that can help you find prospects, and essentially, new clients. Do you have a client referral program? How is it structured?

Image credit: Avolore

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