Have you ever thought about taking the time to set up a customer referral program? If well thought out and  built to meet the needs of your customers, customer referral programs can elicit some big time profits!

A customer referral program should:

1. Engage current customers by rewarding them for bringing you new customers.

2. Enhance your brand and make more people aware of your business.

One great way to start a customer referral program is to advertise it as a short-term program. This is one way to boost profits quickly. If current customers think they only have a short time to capitalize on a reward, they’ll jump.

If the program appears to be working out for you and you’re happy with the progress, you can always extend the program by saying, “Due to popular demand we are extending our offer to receive XXXX for the referral of new clients.” At this point you can choose to provide a new end date or maybe run your program indefinitely. But always start with an end date in mind. This will give you time to test it.

Think long and hard about what type of incentive you will offer your clients for the referral. Before immediately doling out discounts off of upcoming purchases, consider what other benefits you could provide. Do you have something to offer these clients that will not cost you a fortune? Maybe promo items that your customers love that are inexpensive? Maybe a gift card for a coffee or a promo code for a free trial membership? If you’re not coming up with anything that you think is a big enough incentive, a discount off their next purchase is always an option.

Beware the NEW customer that just wants free stuff. Lots of referral programs out there reward the referrer and the referee. By rewarding the new customer, you are potentitally just letting someone in who has no potential to return and just wants something for nothing. Consider this long and hard before you reward both and truly consider only rewarding your current customer.