6 Customer Referral Program Ideas To Increase Store Revenue
If you want a healthy balance of growth and stability at your local business, a customer referral business is a great way to get the best of two worlds. A customer referral program helps you generate revenue by bringing in new business and incentivizing existing customers to return.
If you aren’t running a program like this at your restaurant or local business, here are a few customer referral program ideas to help you get started and bring in more revenue.
Customer Referral Program Ideas
You have multiple options when creating a customer referral program. Use these ideas to get started.
#1) Build Referrals Into Your Existing Loyalty Program
Many local businesses and restaurants use customer loyalty programs to retain customers. These programs date back to the earliest days of punch cards at sandwich shops. Today, it’s possible to launch a loyalty program that ties customers to their phone numbers or email addresses. Customers can earn points and free items by dining at the establishment regularly.
However, it’s possible to add on to your loyalty program by building a referral element. You can ask new customers if they were referred by a friend and submit those referral credits to the loyalty account. Depending on your program notifications, the referrer can receive a text when a referee visits the business and their promotional credit has been applied.
#2) Choose a Balanced Referral Incentive
If your incentive is too large, you may lose money on referrals. If it’s too small, your existing customers might not bother with it. Look at your finances to identify the kinds of incentives you can offer. Many business owners offer a dollar amount for each referral (like $10 off the next bill) or a percentage-based incentive (like 20% off your next order).
If you are worried about the costs associated with your referral program, keep in mind that a one-time discount is worth the long-term customer acquisition. If the referee visits your business multiple times throughout the year, then it’s worth it to thank the customer who sent them your way.
#3) Build Tiered Incentives
If you want a more advanced option, you can build a tiered referral program that rewards people based on the more customers they send to your business. This allows you to build strong connections with your biggest brand advocates and to thank them for your support.
With a tiered system, any referral earns the customer a reward. However, the more customers they refer, the better their rewards get. For example, a $10 credit could become a $25 credit after five referrals. This could jump to a $50 credit (essentially a free meal) after the referrer sends 10 people to your business. Creating this structure can help you identify your top customers, who you can then invite to other special events like secret menu tastings, seasonal soft openings, and branded events to continue the rewards.
#4) Make Sure Both Parties Get Rewarded
One thing to keep in mind as you build out your customer referral program (and the finances around it) is the dual nature of reward systems. While some people will try out a new business based on a friend’s recommendation alone, it also helps if they have an incentive to do so.
Try to make your referral program a double-benefit system. This means the referrer benefits, but also the referee. In a restaurant setting, this could mean offering a complimentary beverage or dessert to first-time diners. It could also mean providing a coupon to the people who referred the new business. Not only does this help you start the new relationship off on the right foot, but it also increases the chances that new customers will try out your business and then become returning fans.
#5) Remind Customers About Your Program
Customers may be interested in your program and then quickly forget about it. You can’t tell them once about your customer referral program and expect them to keep that in mind for months or years to come.
Use marketing automation to set up timely campaigns that remind customers about your referral program. Leverage your email and text marketing lists to set up campaigns on a timed-release so customers get reminders every few weeks or months.
#6) Think About Your Referral Program in the Long-Term
Don’t think about your customer referral program as a one-time marketing campaign. Think about how it can provide value to your business over the long-term. A weekend promotion or an event will last a few hours. However, your referral program can run for years with referrals continuing to trickle in over time.
Make sure you are set up to monitor the results. Use a customer data platform to track the number of referrals brought to your business each month and forecast growth for the future. Key metrics to track include the number of new referrals (and the total cost awarded in referral incentives) and the total number of new customers and what they spend.
Build a Customer Referral Program That Increases Revenue
You have many options when it comes to building a customer referral program. You can invest in high or low-tech options, flat or tiered systems, and single or double-party rewards. Learn what other companies in your area do well and where they need to improve. Then, build a referral program that matches your brand and your goals for growth. When done well, you should be able to keep growing your customer base each month.
If you need help with any of these tactics, turn to the experts at MyArea Network.
We can help you build a marketing plan that helps your local business grow your revenue through customers referral programs and other proven local marketing strategies. See what we can do. Schedule your free call with our team today.