Pop quiz!

Q: What’s better than a happy customer?

A: A happy customer that brings you more customers.

A customer that brings new leads to your business is worth their weight in gold. Customer referrals have huge benefits for your business:

Every generation agrees — you can trust a referral! (Source)

In this post, we’ll explore 5 customer referral program best practices to increase your revenue.

5 Customer referral program best practices

“One customer, well taken care of, could be more valuable than $10,000 worth of advertising.” – Jim Rohn

A customer referral program can have a huge impact on your revenue, yet only 3 in 10 companies have one. Below are 6 best practices to help you get started with customer referrals or help you develop your existing referral program.

  1. Write it out
  2. Timing is everything
  3. Make it as easy as possible
  4. It’s not what you’re asking for, but how you’re asking for it
  5. Manual or automated?

1. Write it out

The first step for an effective customer referral program is to nail down what your program looks like.

This means asking yourself questions like:

  • Who will you ask for referrals?
    • Will you ask every customer?
    • Are there certain customers that come to mind?
  • Who will ask the customer for referrals?
    • Your business owner?
    • The account manager?
    • Both?
    • Someone else?
  • When will you ask? Will you ask more than once?
  • What will the messaging be?
  • What will customers receive for making referrals?
  • What tech do you need to be successful?
    • How will you measure success?
    • How will you keep the program organized?

A written program creates a consistent experience and cements the process into your overall business processes.

To simplify the process of writing out your program’s details, we created a template for you! You can access the PDF version of it here:

Your Agency’s Referral Program Template

A written process gives the rest of the business clarity on how to proceed. It answers questions that may come up and helps you navigate uncommon situations with a protocol.

2. Timing is everything

The best time to ask a customer for a testimonial or a referral is when their energy is high and success is fresh.

This means asking them right after a completed project or purchase. You’ll be on their minds, and they’ll associate strong positive feelings with your brand.

As a rule of thumb, reach out to your customers for a referral when the results start to come in, not as soon as they sign a contract or make a purchase. If they don’t respond, try again a few weeks later.

Asking for a referral too soon sends a message that your company only cares about a recommendation, not about the customer.

How soon is too soon?

Joey Coleman, author of “Never Lose A Customer Again”, talks about this question on the podcast, “Social Media Marketing with Michael Stelzner”. Joey says that the problem with asking for a referral, testimonial, or review up front is that it’s too soon. He compares it to dating:

Joey says,

“Imagine you go on a first date, you have a wonderful evening… You hit it off. You walk the person home, you’re standing at the door… Imagine if you then said,

‘Before I go, you mentioned over dinner you have two roommates. And my gut instinct is the roommates are very similar in age, demographics, wants, and needs in life. Would you be willing to give me their emails and phone numbers? Because, if you enjoyed dating me, they’re going to love dating me too.’”

You can learn more about customer retention from Joey’s book, “Never Lose A Customer Again

On the flipside, if you wait too long, your customer may forget how good the experience was. Out of sight means out of mind – so catch them when they’re excited about the work you’ve done together.

You might have long-standing relationships with some customers. Think about your client base and map out which clients feel great about you right now. Reach out to them.

Unless you keep in frequent contact with a customer, asking them for a referral longer than 6 months after a project isn’t productive. They might give you a referral, but the likelihood is far lower than a recent customer with positive results.

Don’t wait! Strike while the iron is hot.

3. Make it as easy as possible

When your customers share referrals, testimonials, and reviews, they do you a favor. They don’t have to do them, and you receive the vast majority of the benefit.

The least you can do is to make the referral process as easy and painless as possible for your customers. This means doing most of the work. You can:

  • Write out a template for them to fill out
  • Give them step-by-step directions for how to leave a review or referral online
  • Create a feedback or review survey and send it to them via email

The main idea here is to reduce friction. Be clear about exactly how to leave a review and what information you’re looking for. People are much more comfortable making decisions when it’s clear what they’re getting themselves into.

4. It’s not what you’re asking for, but how you’re asking for it

Sometimes getting a referral is as easy as doing great work and letting your customers do the rest. Sometimes, you need to do more than hope to get customer referrals.

Stay in touch with your customers. Reach out to them after they purchase your product or work with you and ask them “transformation” questions:

  • How was the targeted business area performing before you became a customer?
  • What problems did you want to solve with our product/service?
  • Did you have any hesitations before you moved forward with us?
  • How is the targeted business area performing after you became a customer?
  • How has our product/service helped you?

These questions will give you the information you need for a review while keeping the focus on your customer. How you frame the question is critical. The answers to these also give you great information on how to sell better.

Using your customer’s own words is a strategy called “voice of customer”. This lets you speak directly to your potential customers’ needs and pain points in the future.

Keep the conversation focused on your customer when you’re asking for referrals as well. Don’t make it about you. Instead of asking one of your customers,

“Who else can I reach out to?”

Refocus the question to be more about your customer and their success:

  • “Do you know anyone else facing the same issues you had?”
  • “Do you know another business in need of ____?”
  • “Are there other companies like yours that would benefit from this?”

You can also motivate your customers with an incentive. You could offer them:

  • Amazon gift cards
  • Starbucks gift cards
  • A discount on a product or service
  • An invitation to a company event
  • A donation to a charity of their choice
  • Entry into a contest

Get creative! One of our partners at ActiveCampaign is a painter and rewards her customers with exclusive artwork. It doesn’t need to be grandiose — even a personal thank you note goes a long way.

5. Manual or automated?

When it comes to customer referral program best practices, you can use either a manual or automated outreach system. What’s important is that you have a process to follow-up with your customers.

If you decide to execute a manual customer referral strategy, write down 10 happy clients on your client list.

How can you identify happy clients?

  • They’ve told you they’re happy
  • They’re engaged
  • They’re a repeat customer

Whatever it is, make a note of it and reach out to them with a personal message. Thank them for being a customer and ask them for help.

You might feel like you’re bothering them. Automating customer referral emails can help remove this fear and anxiety.

For best results in an automated scenario, create a system of organizing your clients. The best way to set up your email automation is through segmentation (or categorizing) your contacts.

You can trigger your email automation to start when a:

This customer referral process automation is available to import into your ActiveCampaign account for free!

Take it a step further and use ActiveCampaign’s contact and lead scoring feature to make sure only your most engaged customers enter the automation!

Whether you’re using a manual or automated customer referral strategy, your email outreach should include:

  • A “thank you” for being a loyal customer
  • Personalization
  • A customer-focused ask for a referral

You can use this email template as a framework for your own referral outreach emails.

Your customer referral program strategy can include both manual and automated pieces. Automated emails combined with manual follow-up phone calls give you the best of both worlds — and a better chance of connecting with your customers.

Conclusion: Customer referral program best practices still take practice

The key to any successful customer referral program is measurement and adjustment. Take these 5 best practices and tweak them for your business. Iterate, measure, and improve.

What works for one business may not work for another. And every customer is different. At the end of the day, your customer referral program will benefit from these best practices:

  1. Write it out
  2. Timing is everything
  3. Make it as easy as possible
  4. It’s not what you’re asking for, but how you’re asking for it
  5. Manual or automated?