How to Design Sure-fire Customer Referral Programs

14 Feb, 2011  |  Written by  |  under Uncategorized

The age old adage of the customer being king holds good even today; there is no business without the customer, and any company that does not realize this simple truth stands to lose in the long run. The biggest mistake that most companies make is that they often forget their loyal and long-standing customers in their efforts to woo new ones, and in the process they end up losing everything that matters. When existing customers are not treated well, they not only take their business elsewhere but also tell the whole world of their shoddy previous customer service experience. And with the massive reach that the Internet and other forms of media have today, the bad publicity spreads like wildfire and new customers are reluctant to sign up.

This makes customer referral programs even more important in helping to build your business. They cause a positive double whammy – they not only bring you new customers, but also help retain your old ones. But if you don’t design your referral programs correctly, they may not work the way you envisioned. To ensure that you hit the success button with your referral programs, here’s what you need to do:

  • Make them profitable for you and enjoyable for the customer: If you give away much more than you’re going to get in return, you’re going to be running on a loss sooner than later. So while you must ensure that the rewards you offer customers who get their friends and family members to sign up with your services or buy your products are substantial and worth their efforts, you cannot go all out and promise what you cannot deliver or what you cannot hope to sustain in the long run.
  • Don’t make them too complicated: If your rewards program is too hard for your customers to understand or too difficult for them to implement, then they’re not going to be interested in it. Make things as simple as possible – if you own a telecommunications company and if your customers get five people each to sign up, they get a certain number of free calling minutes. This way, you get to build your customer base while your existing customers get to enjoy free phone calls. It’s a simple plan that works equally well for both you and your customers.
  • Don’t compromise on your quality: And finally and most important of all, you must ensure that your focus on your referral program, its rewards, and signing on new customers does not cause you to compromise on the quality of your products and services. When your quality goes down, your referral program is going to suffer because no one wants to recommend something that is not good to their friends. Also, you end up losing your existing customers as well if you don’t pull up your socks and continue to compromise on the quality of your services and products.

Equality, simplicity, and quality – these are the magic words that will boost your customer referral programs and enhance your business.