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Referral Programs have the ability to become your company's most valuable source of new business. But the fact is, referral programs are not always easy to create, manage, or maintain. In this article, we've outlined the top 5 problems businesses have with referral programs and our best tips on how to solve them. 

1 - Gaining Momentum With Your Referral Program Can Take Time.

We live in a fast-paced world where strategies like paid advertising can be enticing because of their ability to deliver leads quickly and on-demand. A referral program, on the other hand, can often take time to cultivate. After all, the time involved between launching your program to generating referrals is not always as immediate as paid advertising. However, it's a misconception that satisfied customers are the only ones who can refer new business to you. Referral sources can be customers, prospects, employees, family, friends, and partners.

While gaining initial momentum with your referral program may take a little time, the dividends that your time investment will yield will be well worth it. Companies with formalized referral programs experienced 86% more revenue growth over the past two years when compared to the rest. (Source: Heinz Marketing) Once your referral program has been incorporated into your company culture, your pipeline of referrals will begin to flow with surprising speed and consistency.

2 - It's Not Always Easy to Ask For Referrals.

Many sales team members are simply not sure when or how to ask for referrals. Do you ask at the point of sale or after closing? It's not easy to ask for a referral right on the heels of getting that customer to agree to sign with you. How do you keep your sales reps engaged with your referral program? These are great questions that our founder & CEO answers in this video clip from a recent podcast with Hook Agency. Check it out below:

3 - Referrals and Advocates Can Be Difficult to Track.

When a potential new customer tells you that they were referred by someone else, where do you put that information? Some companies make a note on the account profile, assuming that information will follow that person through the sales process and the right team member will take note of it later to follow up. Some companies use spreadsheets to record and track their advocates and referrals. Unfortunately, neither of these methods offers data-based tracking so program analytics can be a challenge. Using a digital solution like the one we offer at GTR can eliminate this headache completely.

4 - Referral Rewards Can Be a Hassle to Track and Send.

The best referral programs include some kind of incentive or referral reward. Oftentimes, referral programs are set up to offer gift cards or checks (for those offering cash rewards). While these kinds of rewards are often well-liked, they then need to be purchased and shipped out, which can be seen as a hassle by staff. In the digital age that we now live in, we recommend including a referral reward solution that delivers rewards quickly, ideally with some automation in place to save time for you and your staff.

5 - Momentum in Referral Programs Can Be Difficult to Maintain.

Many businesses make the mistake of only promoting the launch of their referral program. While we definitely recommend a launch promotion - don’t stop there. A strong referral program requires ongoing promotion and momentum.

We’ve found incorporating your referral program into each stage of the customer journey to be the best way to build a strong referral program foundation and momentum over time. Promote your referral program on your website, your email signature, your business cards, and on your social media accounts too. Then, during the sales process, your team members can formally introduce your referral program, including whether or not you offer rewards. Then, you can simply remind them how much you appreciate referrals (and any rewards you offer) whenever the opportunity arises. 

How GTR Solves These Problems For You


The problems that come with referral programs are real, but we've created a powerful solution. We understand that running paid ads on Google and social media can yield impressive results in gaining exposure and generating leads, but these results get expensive quickly and come at a high cost. We've found the real power comes from your company launching its own branded app with your referral program built-in.

Our platform offers your company its own branded app with a backend dashboard for easy, yet powerful program tracking, management, and analytics. You'll also have the ability to email your customer base with a link to launch your new referral program for the strongest possible results. Consider your current customer base and how that might impact your business. If you emailed 500 customers about your referral program, you just increased your chances of getting a referral by 500. And just think, if only 10% of those customers referred someone to your company - that's 50 referrals!

Your branded app also becomes a piece of prime real estate on a person's mobile phone, allowing you to stay top of mind and giving you direct access to that person in the form of in-app messaging and push notifications. With all of its features, your app will provide your customers with a transparent, trustworthy customer experience. And, with your referral program built-in, the ability and option to refer become powerfully organic.

Your app also intuitively automates the tracking of referrals and allows you to reward your advocates automatically with our built-in payment feature. In no time at all, your app will become one of the most powerful instruments in your company's toolbox. When you incorporate your branded app into your company culture, your built-in referral program has the ability to become more self-sustaining and a more powerful source of new business than you ever dreamed possible. Find out more below!

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Additional Resources:
10 Reasons Referral Programs Fail by Sales Panel
The 6 Most Common Reasons Referral Programs Fail by Referral Rock
8 Referral Marketing Strategies to Encourage Customer Advocacy by Annex Cloud