Finance

Creating a Referral Program that Increases Cash Flow

Creating a Referral Program that Increases Cash Flow

The fact is that going through referrals is a great way to build a business; it’s one of the fastest ways to grow businesses.

Instead of calling up individual clients and saying, ‘Hi, are you ready to buy my product yet?’, now you can reach people who have a bunch of audiences, just as you have. 

By grabbing only 1% of them, you will be able to spread your message to hundreds, thousands, and millions of people, saving you time and effort.

Let’s go for a concrete example. Let’s think of a carpet cleaning business. Instead of spending money after newspaper or TV ads, they are going to carpet and flooring shops, interior designers, property management companies, and letting agents. 

What are they doing there? 

They offer them some gifts— maybe cakes or fruits— and leave some leaflets. (Well, if you take cake or fruit from somebody, you cannot possibly say ‘no’ to the leaflets). And they keep on visiting them regularly to offer more leaflets.

Lastly, develop a relationship with them so that they get involved in the give and take process, and it becomes an amicable job for both of you.

And that works! That gets them lots of customers who want to have their carpet cleaned by them.

 

Building up a Referral Program— Step by Step

 

  • Determine your Goals

Increasing cash flow is always an enticing goal. But that’s not the only thing you should focus on.

If you have a plan to penetrate a new market, you might employ your referral connections to find out the name of industries that would benefit from your product or service. 

If you just want to grow your brand awareness, your plan of giving reminders to your customer in a variety of ways would be more useful.

Try to set your goals keeping mind that they are:

  • specific
  • measurable
  • affordable
  • relevant
  • time-bound
  • Understand How to Incentivise Referrals

To get benefits from others, you need to give something to them.

This is a very simple theory.

The best time to offer is exactly when they sign up.

If you take time and get back to them after a while, you are likely to find him demoralized and discouraged.

Start with a low offering. Gradually, you go higher as your flow of referral customers grows.

 

  • Leverage Your Current Customers

Instead of focusing on new referrals, turning to ones who have already used your product or service is the best and most effective way.

They can best recommend and market your product.

Try to find those who are satisfied with your offerings as well as likely to refer you.

Here you can remember the first example of the carpet cleaning business.

They found out similar departments of business— businesses that are somehow related or relevant to their own.

New stock market reviews on BizReviewed.com has more on this.

 

  • Leverage Your Employees’ Connections

If you run your business for some time, you get associated with some people who work for you.

Try to use their connections. They know you better than anyone else. So they can refer others most successfully to you.

 

  • Measure Success and Failure

Here is the point where most people make a great strategic mistake.

They celebrate success and forget failure.

If you don’t understand your failure well, you don’t know where to employ more power to get a better return of revenue.

If you don’t analyze your mistakes and failures, you don’t know where to correct, alter, amend, or improve.

Most people keep rowing boats with so many hidden holes at the bottom.

 

4 Points to Remember

Creating a Referral Program that Increases Cash Flow

Now that you’ve got the taste of referral programs, you surely want to do it.

In this last part, we’ll summarize the entire picture into four basic points.

Before you really get into the business, you need to remember the following four things:

 

  • A Win-Win Situation

The first thing you need to know about a referral program is that it has to be a win-win situation.

You cannot just expect people to refer more customers to you if there is no benefit.

Take the case of Dropbox.

They are one of the prime examples of an amazing referral program. 

What did they do?

If you refer more people, you get more storage space.

Now, why wouldn’t you refer more people to get more storage space? 

That’s how it’s a win-win situation, and that’s way better than paying them $5 or $10 a month.

Then they make it even easier: you can refer other people with a tweet, an email link, and whatever way you can use.

 

  • A Referral Program

This is the second thing you can do— you can set up a referral program software instead of creating a referral program from scratch.

Let’s say you are an e-commerce site.

You can use solutions out there like ReferralCandy or Google referral programs.

There are tons of them. They are all on the search list.

Such software makes it so simple; just plug and play.

You don’t have to spend an arm and a leg on development. 

 

  • Start your Referral Program When you are Onboarding

And this is where most people make a mistake. You need to invite people right when they sign up. You wait, and you lose.

 

  • Flowing with Your Product or Service

Your referral program has to flow with your product or service and be integrated within it.

For example, if you cap out on storage space in Dropbox, it will be like, ‘Hey, sign up for paid service, or refer more people.’ If you want to pay, great! Go and pay. But if you want to refer more people, that’s also possible.

And that’s what creates a win-win situation.

 

Final Words

If you get the big picture of the referral program, you are on.

You can start spreading your business out to every part of the world where there are people who want to buy your product or service. 

Tagged , ,