Why Your Referral Program Is Not Working?

Good customers want to do business with your company. Your best customers buy your products or services frequently, in larger amounts, and cause fewer problems: they are profitable customers.

Customers like this should refer new customers to you, so you make more profit more easily. Many of them do, but some issues can limit how effective your referral program can be. Let’s look at common reasons companies are not getting great results with referrals.

Reason #1: Referrals are Occasional and Haphazard

A Texas Tech University study tells that 83% of consumers are willing to refer after a positive experience, yet only 29% do. Asking for referrals frequently and following up with customers are two important things that will directly impact the number of referrals to your company. More referrals come by encouraging customers to do it. You can learn more at “How Can I ask For Referrals?”

Reason #2: What If?

The second possible reason your referral program hasn’t worked is your that the customer is not convinced that you will get in touch with their friend, relative or associate, the way you look after them, so they play safe and tend not to refer.

A good referral program starts with excellent customer service and sales team clarifying referrals will be taken seriously.

Reason #3: Lost in the Mix

If a customer refers a friend, they feel accountable for this referral and expect to have an update and a thank you for that. By complimenting, communicating and rewarding right your referrals, you encourage them to continue to refer and spread the word for your company. Read more about “The 5 Best Practices of a Referral Program.”

Reason #4: It seems ‘Funny’

A lot of happy customers just feel ‘funny’ or ‘exposed’ by telling a friend to become a customer. People don’t refer them often, so they don’t really know how to do it, themselves. A good referral program, with an easy submission process like a mobile app, helps happy customers to be comfortable and refer more frequently. Learn more on “Building a Successful Mobile App for Your Referral Program.”

Reason #5: What do I earn for that?

To increase your customer’s interest in referring friends and family, you need to offer them something. That ‘something’ is a reward. The best way to work is to set different rewards for different stages of a referral, from submitted to sold. This way you will keep the customer interest to do it more since as they consider themselves special with the reward. Read more on “Referral Rewarding Can be Very Rewarding.”

To conclude, have in mind that an excellent referral program should consider:

If you want to learn more about how a referral software can increase your sales, subscribe to our blog and schedule a demo today and we will show you!