Are you referring to me?

by Guest Blogger – Pam Stellema

Is yours the kind of business that would benefit from customer referrals?

Some businesses are better suited to this marketing activity than others, but referrals from your existing customers can be an excellent way to build your customer base and hopefully increase your turnover.  Just imagine how wonderful it would be if even ten percent of your customers were to send friends and family members to do business with you.

Well, it’s not that hard to make it happen, but there’s a few things to consider before you get started on your referral program.

The first thing is to learn about the WIIFM rule.  This rule is the basis of getting your referral system to work well.  It stands for “What’s In It For Me” and without considering this important question and its impact on your referral program, you might not enjoy much success.

So, what does this mean for you?

It means that before the majority of people will go out of their way to recommend your business, they will ask themselves “What’s in it for me to recommend this business to someone else?”

Unfortunately, most people are a little selfish when it comes to this, so you need to consider what kind of incentive is required to make it worth their effort.  Once you have an answer to that question, you then need to decide what kind of incentive you are willing to offer a new customer to try you out.

Both incentives need to be worthwhile in the minds of the recipients.  I can’t stress this enough.  Now is not the time to be tight fisted.  I usually recommend that you think about what kind of incentive it would take for you to go out of your way to recommend a business to someone.  Would it take a $10 voucher or perhaps much more?

The answer will depend on the price point of your services or products.  While $10 might be just the right amount for someone who sells services under $100, it probably wouldn’t be a sufficient incentive for services that cost many hundreds or thousands of dollars.

Next consider ways you can make it as easy as possible for your customers to refer you to others. The less effort they have to put in, the better the results.

Finally, don’t just sit back and expects amazing results from a passive referral program.  If you want your referral program to work for you, then you must work it.  Let your customers know about your new program and the benefits they will receive from it.  Tell them regularly, and don’t make them wait for their rewards.

To sum it all up, keep your referral program simple, make it worth your customer’s time to refer your business to others, reward them promptly for their referrals and enjoy the great results you will achieve.

Pam Stellema is a Specialist Profit Coach for owners of small business including franchisees. Her area of expertise lies in mentoring, motivating, increasing productivity and profits, achieving excellence in customer service and client retention, and recruiting and retaining key staff.


Pam can be contacted on 0431 975515, 0755 296 467 or via her website.


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