Referral Offers Your Customers Can't Refuse

By U.S. News Staff

May 19, 2009 RSS Feed Print

Every startup entrepreneur hopes to build a solid and consistent stream of referred leads. To make this happen, you must provide a great product or service and a great experience, but that's often not enough on its own. To get the referral tap flowing, you also need to create compelling ways to stay top of mind with your referral sources and convince them to sing your praises. Here are referral tactics I've seen startups use successfully:

Expectation: This is the simplest tactic of all. During your lead conversion process, mention that "we know you're going to be so thrilled with our business that in 60 days, we'll check and make sure you're thrilled, then ask you to suggest three others who you know would love this result. Is that a deal?" Don't overlook the ease of how this works. It's powerful.
Gift certificate giveaway: Send a quarterly mailing to your customers and referral sources, offering a gift certificate of real value for your products or services. Tell the recipients that they're free to forward this to anyone they choose. Many customers want to refer you; this gives them something tangible to use in the process.
Nonprofit partner: Find a group you want to support, then propose several ways to create a deep partnership, such as a campaign that benefits your partner for every widget purchased this month. This kind of campaign is a win for all and can motivate your partner to introduce your promotion to his constituency.
A 100-percent refund: This one works because it sounds so good. When customers buy a fixed-price product or service, offer them a 100 percent refund on their purchase. All they need to do is give away four special cards to friends. For each of these cards that results in a new customer for you, your referral source gets a refund of 25 percent up to 100 percent. This is really just paying a commission for referrals, but it turns into a game with a nice marketing ring to it. Don't forget to take photos of all your 100-percent refund club members.
Secret price list: Another great way to earn referrals is to surprise your customers with a deal. Once they agree to a price, offer them a lower price if they provide referrals on the spot. I once worked with an electrical contractor who did this using postcards that the customer would fill out immediately, referring them to a friend.

—By John Jantsch, a veteran marketing coach, award-winning blogger and author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide. Find out more at ducttapemarketing.com.