How to Turn Your Business Into a "Referral Machine"

Set up a referral program for your business and
turn it into a “referral machine”. As small business owners, referrals from existing happy customers are one of our easiest (and best) ways to gain new happy customers. So why do we often make it harder than it should be for our customers to refer new customers?

In this post, I’ll show you a few ways you can put a referral program in place so your customers can easily refer others to help your business grow. Putting this plan into action may increase your sales by 100% or more, so make this a priority.

A Sign Flipper Lights the Way

I recently saw a sign flipper advertising outside of Chipotle, where I was eating lunch. He was advertising a free eyebrow wax at a place called European Wax Center across the parking lot from Chipotle.

A few weeks later, when I needed my eyebrows waxed, I called European Wax Center. They asked me, “How did you hear about us?” and I mentioned the sign flipper. I confirmed that there were no restrictions on the free wax and booked my appointment.

Yesterday, I went in for my free eyebrow wax. When I came in, they had me sign a healthcare form (the standard “give us your information and release us from liability” that all doctors’ offices have.) I put my email address on the form, not thinking much of it.

Priming Your Customers for the Referral

The wax process went perfectly fine. In the room where I was getting my wax, there were three framed posters, each advertising European Wax Center’s wax program and their referral program.

At the end of my wax, the lady at the checkout counter asked me how everything went. When I said “It was fine”, she asked me if I’d like to sign up for a program where you buy 9 waxes and get 3 free.

Interestingly, the program is buy 9, get 2 free, but if you sign up on your first visit, you get 3 free. When I declined that offer, she asked me when I would like to schedule my next appointment. I declined this too, citing the fact that I might be moving soon.

An example of one of the cards (front and back) at the front of European Wax Center.

In front of her, there were several cards I could take to refer a friend, sign up for the buy 10, get 3 free program, or even sign up for a year of unlimited waxing (!).

Follow Up with Email

When I got home, I was surprised to see two emails in my inbox. One asked me to refer friends and gave me a link to click on so I could give my friends a coupon for a free wax. When I clicked on the link, I was taken to a website that automatically opened my email client with a pre-written email offering my friends a free wax…and a custom referral link that would credit my account $5 for every person I referred.

The other email contained a coupon for 50% off my next wax.

Your Priority: Provide Excellent Service First

Why am I telling you all this? It’s to point out where your business can improve its chances of getting referrals from customers…dramatically.

First things first: Your business has to provide excellent service. My wax was good and future waxes were competitively priced. The technician was friendly and enjoyed working there (I asked her how she liked it–she said she liked it because she wanted to do waxing all day and most day spas don’t get enough waxing business to enable her to do that.) The store was clean and the posters and postcards were well-designed.

Those are the basics. If you don’t have a good product, you won’t get referral business.

From then, it’s really about how many times you “touch” the customer and ask them to refer others. You’re not beating people over the head with it–in fact, you’re rewarding them for being loyal and referring their friends. Although it may seem like they were hitting me over the head with it based on my story above, they built this on an overall good experience, so I wasn’t bothered.

Let’s look at how many times I heard about their referral program:

1. Cards in the front near the receptionist (see example at the top of this post).
2. Posters in the room.
3. Email afterward with built-in referral link that I could send to my friends.

#3 is particularly important to do the right way. I hate the systems that force you to enter the email addresses of everyone you want to refer. Why put this pressure on your customer? As the customer, I’d much prefer a link that I can Tweet out, post on Facebook, and perhaps blog, and let the people who are interested sign up themselves.

The best option is to offer both, as European Wax Center’s system did: Give the person an email that’s pre-filled with their link, and also give them the link (with buttons to Tweet it or Facebook it.)

Rewarding Your Customers for Giving You Repeat Business

And then, the loyalty program. This was mentioned four times to me: the cards, the posters, the email afterward, and also by the person at the front counter. She also did something clever (that is clearly part of their employee training): she didn’t ask me if I wanted to set up another appointment. She said, quite deliberately, “When would you like to set up your next appointment?” She didn’t give me a chance to say “No”.

Most customers default to “No.” “Would you like to…?” “No.” But if you don’t give them a way to easily say no–and make the assumption that they want to come back–they are more likely to come back. This should be part of your employee training if you have employees on the “front line” with customers and you rely on customers to continue saying “yes” to you.

Is This Totally Awkward?

Does this all seem just a little bit uncomfortable to you? Would you feel weird changing your language to get customers to say “yes”, or framing posters advertising your referral program? If it feels weird, understand that your own fears are hurting your business. Your fears are that your customers may not like you, but it’s likely the case that your customers will refer more customers if you institute some or all of these policies.

And while there may be a few people who don’t appreciate your referral program, remember there will always be those who don’t appreciate what you do. It’s better to have more happy customers, and this is a great way to do it.

By and large, your fears of offending, hurting, or scaring your customers are inside your head. Get through those by instituting the policies and refining as you go based on customer feedback. You have a whole lot more to gain if you offer these programs than if you don’t.

How do you help your customers refer others? What types of referral program work (and don’t work) for you? Let me know in the comments!