As a business, you may ask yourself why reward your customers for referrals. The simplest answer is because you stand to gain a hefty reward yourself!
You wouldn’t ask an employee to do a job without offering to pay him for his time, so why ask a customer to take his time and promote your business without offering to pay him too? Same as rewarding your employees can benefit your business, so can rewarding your customers.
Numbers don’t lie!
According to Nielsen’s report, 84% of people trust recommendations from friends and family, and also that people were 4x more likely to make a purchase when they are referred by a friend or someone they trust. That’s a lot of new business! And rewarding is a huge part of this process.
A B2B Marketing Mentor study shows that over 50% of consumers are more likely to refer if they get an incentive for that. The incentive could be monetary, social recognition or inclusion in an exclusive program; but 39% said they were more likely to send referrals based on monetary incentives.
But what and when can you offer rewards?
With all the information gathered so far, it would appear to you that offering an incentive-based referral program just makes good business sense. But the next questions would be: what can I offer and when?
You can offer different levels of incentives based on the quality of the lead. For example, you can provide an incentive for any lead that results in a sales appointment (regardless of whether the referral makes a purchase). Then, you can offer a better incentive if one of those leads results in a sale. This is a great option for businesses that have a long sales cycle.
By setting your incentives up in this way will help you increase the quality of the referrals you receive since when incentives are tied to the quality of the lead, your referral sources will be intentional about bringing you the best leads possible.
When you make incentives part of your customer referral program, you maximize the number and quality of referrals you receive. You also get back the cost and effort invested, as you convert those referrals into deals, which means money!
If you want to learn more about how a referral program can increase your sales, schedule a demo today and we will show you!