How To Start A Referral Business

How to Start a Referral Program: 4 Simple Steps to Success

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Referrals are one of the most cost-effective and rewarding ways that you can promote your business. But they can be hard to get if you don't have a referral program in place. Relying on word-of-mouth will only get you so far, so you truly need a plan of attack if you're going to make a referral program work for you.

We're going to take you through how to start your own referral program in this resource so that you can use it to bring in more clients, reward your best customers, and increase your profit.

Step 1: Figure out where your existing referrals are coming from to know where to get more referrals in the future

As a high-quality home service provider, you've probably done business with at least a client or two who have been referred to you.

Pay attention to the source of these clients. It's a great indication of where you could get even more successful referrals if you put in a little bit of effort. Plus, knowing your source will help you to build a more specific and targeted strategy down the road.

For example, if most of your referrals are coming from a specific service (say you own a landscaping company and most of your referral business is for interlock), then you can start to determine why and how you're being referred.

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Try asking your clients how they heard about you, and why they chose your business. It might be because your services are more affordable, or is it because you offer a higher-quality service than your competitors.

Once you determine where clients are coming from, it can help you to decide which clients to contact and how to get in touch. Plus, you can get a better idea of what services you're strongest at in your clients' eyes, and where you can make improvements.

If most of your referrals are for a specific service, consider offering that as an incentive to get your existing clients to pass business your way—if everyone loves the great job you do with interlock, offer that as the reward for a referral!

Step 2: Choose how to reward your clients after you ask for referrals

Some referral programs offer clients rewards like gift cards or even cash bonuses, while others offer a free service or a discount. Which you choose for your business depends on what services you offer and how much a referral is worth to you.

You will need to consider:
What you think your clients will appreciate the most
What you can afford to give
What the limitations will be

For example, you might determine that for each referral you get for a specific service (say a weekly house cleaning for a three-month period), you will offer the referrer one free or discounted service in return.

Or, you could offer referring clients a $25 gift card for each referred client that signs a contract.

Make sure to pick something that reflects your business, your clients, and that makes financial sense for you.

Try to pick something that strikes a balance between offering value to your clients without costing yourself too much in lost profit.

Want to understand profit margins better?

In this piece, an accountant walks through the process

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Step 3: Build a communication plan

After you determine how and when you want to reward clients for sending business your way, you need to communicate your new initiative to them so that they're aware of your referral program.

If you already have a client marketing or communication strategy in place, then great—just fit this into your existing plan.

But, if you don't, you can use Jobber to keep track of happy clients, or get in touch with existing clients and new leads through email and postcard marketing, or Facebook or Instagram ads.

Using a digital marketing integration, like Mailchimp and Jobber, will help you monitor the performance of your marketing efforts on your referral program, track your leads won and clients, and automate some of your communication with them.

Your communication plan can be as simple as sending out a generic flyer detailing your new promotion, or as personal as contacting each of your best clients individually.

Match your strategy with how you want clients to view your business to drive home your brand values and engage your personal client base.

Tie everything off with detailed notes in your client account history. If you've won a client over through referrals, then make note of that in your CRM.

Don't forget to make a note in the referral source's account history too. These types of clients are a perfect fit for further referral incentives down the line because they have proven that they will work for you if you offer them an incentive.

Interested in postcard and email marketing the easy way?

Automate and integrate everything with your CRM

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Step 4: Solicit online reviews to improve referral results

In a world where most customers take a look at a business's online presence before deciding to work with them, it's important to consider how you look when referral leads inevitably search for your business online.

Online reviews on Yelp, Google My Business, and Facebook Business can be very helpful in ensuring that you give potential clients a positive first impression.

Reviews can even set you a couple steps above the competition if they aren't leveraging online testimonials themselves.

Aside from using online reviews and testimonials to bolster your online presence, they can double as a marketing tool for other campaigns as well.

For example, if you decide to send out direct mail, you can use a particularly glowing testimonial screenshot to show potential customers just how happy your clients are.

Unsure about which lead gen and review service to go with?

We break down Angie's List and HomeAdvisor for you in this article

Learn more

How to Ask for Referrals

Now that you know what you want to say to clients, and how to want to get in touch with them, it's time to consider how to approach asking for a referral.

Before reaching out, there are some important considerations to make based on your clientele account history. For example:

Who are your very best clients?

Ideally, you should only be contacting satisfied clients who were very happy with the work that you did. Why? Because the happier they are, the more likely they are to refer others to you and sing your praises.

It helps if you can track client satisfaction through surveys and notes in your CRM.

This business owner used customer feedback surveys and automation

to get 500+ 5-star reviews online

How he did it

How far into the job are you?

A happy client you've worked with for 6+ months, or who you've completed a project for is far more likely to be willing to refer you than asking someone who you just started working with.

The people most likely to refer you are the ones who have seen the great work that you do from start to finish.

In fact, one of the best times to reach out to clients is after you've completed a job that they are satisfied with. You can even automate this using Jobber, which can send client follow-up emails on your behalf after each job is finished.

How much time do you have?

While calling each of your top clients individually and asking for a referral is a very personal way to do it, this may not make sense when you think about how long that would take.

Consider breaking up your strategy into different types of clients For example, perhaps your top 5-10 biggest and best clients get personal phone calls while the rest of your clients get a generic email.

When you get around to asking for referrals, it's best to be straightforward, honest, and true to your brand. Consider what you think your clients like best about your services and focus on what makes your business worth referring.

Building a Program that Works for Your Business

Building a basic referral program can be great for any business—your existing clients get a reward, you get more business, and new clients get a service they were looking for anyway.

No matter how basic your referral program is in the beginning, remember that it's always something that you can build on and tweak as needed as your marketing strategy and business grows.

Interested in making referral management easier than ever?

Try Jobber for free and see how it can change your business for yourself