Word-of-Mouth Marketing: Offer Incentives for More Referrals

Use your creativity to develop an incentive program that will reward referrals. People like to give referrals and they LOVE to be recognized for giving referrals. And, incentives are one of the most powerful methods of generating more of them.

Incentives can range from gift certificates to purchase discounts to cash payment based on business generated.

The wonderful thing about an incentive program is that it feeds into people's innate desire to help each other. It is rewarding to know an effort has been successful. Be sure to let your contact know when a referral he or she has made comes through.

Give people a reward that they will really appreciate. At my business (a marketing and graphic design company), we often give people a gift certificate for two at a local restaurant. You could also offer a gift certificate to Amazon or to a local theater or wine club.

I've found a gift certificate to be much more memorable than a cash incentive. The reason is simple - these kind of rewards make people feel special. Finding the right incentive can be a challenge, but it's worth it. You will score big by really building your word-of-mouth business.

Here are some different types of referral incentives you can try in your business:

- If you have a waiting room, you can prominently post the names and pictures of people who refer to your business or practice. Give it a heading that proclaims, "We would like to thank the following people for referring a new customer this past month.

" People are motivated to get their name recognized up on the board and so they will give referrals.

- You can use a direct mail campaign or new customer kit to encourage your customers to send referrals to you. Create an easy-to-complete referral form and a self-addressed, stamped envelope asking that recipients kindly complete the form and return it. You can also include a discount coupon that your recipients can pass along to a friend.

- When you have a sales event, send a letter or postcard or e-mail inviting customers to bring a friend to the event and get an extra discount.

- Offer a gift certificate during the holidays to make gift giving easy for your customers. Give them additional discounts with a coupon.

- Use coupons to encourage new business such as "buy one and bring your friend.

" Or you can offer a "two-for-one" seminar admission.

- Invite your customers to an appreciation event and ask them to bring a guest. Give them both a special gift.

- Ask your current and former clients to pass your name and contact information on to their circle. When finishing a sales cycle with a customer, ask for referral recommendations.

You'll be amazed at how the action of showing appreciation can generate good will and additional referrals. Once a person gives a referral, they become much more likely to continue to refer people your way. As soon as someone sends you a referral, immediately send them a thank-you gift. A card or quick phone call is the bare minimum.

On the flip side, if a person refers someone to you but gets no recognition or appreciation, he or she probably won't say anything to you. But, the person is likely to make a comment to a co-worker, friend, or spouse: "Can you believe I didn't even get a thank you!!!" And...no more referrals from that source.

ACTION ITEM: Consider your current referral program. How are you generating referrals? What could you do to create a Referral Incentive Program for your business? Developing a referral program now will save you a lot of time later. By encouraging a steady stream of word-of-mouth advertising, you will find you are getting more pre-qualified leads - a groups that is much more likely to make a purchase.