This is one of those polarizing business topics- there are two schools of thought, each with passionate adherents.
the āPhenomenalā camp and all the other similar system building scale-up programs: they swear you canāt grow unless you leverage you current customer base into a steady stream of new clients, and you MUST incentivize these people if you want them to act.
the proponents of the "premium experience " whoās aim is to blow the customer away so much that they canāt even control themselves and are compelled to gush about you to all their friends and neighbors organically. ( this is something Dubrosky is always talking about) They believe if you are essentially paying for referrals (through incentives like discounts etc, ) then your referrals arenāt really legitimate and you are failing to differentiate yourself in any meaningful way. There are a whole host of other ramifications for your business attached to that line of thinking.
Iām not really sure where I fit in this debate. I guess I lean toward the latter, more by default than anything else. I would like to formalize something a little better though.
I never had any luck with referral programs. I tried almost everything. When I began telling my existing clients that I was getting referrals they started coming in. I guess no one wanted to be first
I donāt think this is really a program but in our initial estimate appointment email we start by asking for 3 referrals. Setting the customer s expectation that we that we are going to do a great job. And we expect to get the referral. Once they schedule an appointment our reminder email asks if any of there neighbors need their windows cleaned and then we will give both homes a 10% discount if they schedule on the same day.(but really as long as a neighbor calls for an appointment no matter when we give them the discount). Then as we complete the work we have a give them a sheet to check our work and on the back is a place to refer 5 people. We donāt offer a reward anymore finding that people who refer, refer, and tbose who donāt barely do with a reward. However, we use to give out a $10 giftcard to a local restaurant , with a killer happy hour, per referral.
@c_wininger beat me to it. I was going to say pretty much the exact same about 2 schools of thought. And I also lean toward the latter.
Trying to incentivize referrals just changes the dynamic between you and the customer. If you get paid for something, it becomes work. (Which, incidentally, is also my excuse for not accepting payment from friends and family when I help them out with various projects, āIf you pay me, itās work! I donāt want to workā ) People want to do something because it was their idea. So figure out how to make it ātheir ideaā
Thatās not to say you shouldnāt have a system in place for garnering referrals. When I get talking with a customer, I try and work into the conversation something about how most of our work comes through referrals. I could probably stand to be more systematic in my approach, but just dropping that subtle hint that itās āJust what people doā, seems to be fairly effective.
I also try and get it into the conversation . Works great when the clients is super satisfied with the work . Iāll say something along the line " if any of your friends, neighbors or relatives ever ask about window cleaning please pass my number along , refferals are a life line to my business " been working really well.
Boy, Iām a lot more forthcoming than I usually am, lately.
Normally Iād āread and run.ā
Iām a big fan of greasing palms, but not in this case.
My referral program is Reward not Incentive.
Itās after the factā¦
Meaning, itās not "hey Iāll save/pay you this much for each new cust."
Itās more along the lines of simple acknowledgement, and non verbal āIām happy to this little extra.ā
Truth be told, I probably do a few too many ālittle extras.ā
but Iāve got A LOT of loyal cust over the years.
it probably breaks up into 2 schools cause of left brain right brain dominant thinking people, a la apple vs PC, democrat vs republican also reminds me of this
my observations end up that a referral comes from 2 things aligning: first, the topic is brought up FIRST between friends, THEN your customer will recommend. meaning the non-customer says something like my windows are terrible! then your customer says you need to call this guy.
no one is going to go around telling everyone about you like theyāre selling girl scout cookies or whatever sales promo in school people did in elementary school
demanding 3 peopleās names or whatever is lame, would you want to do that? I wouldnāt.
youāre always going to be at the mercy of the customer and circumstances since you cant control them
but one can do fun things or creative things to make the program memorable or to at least acknowledge their referral
the money wouldnāt be to incentivize it but to acknowledge as a token of appreciation
i used to sell home insulation years ago on commission. i offered everyone a talked to $25 if they sent a referral that turned into a deal. as mentioned above most customers did not participate and a few did often.
but the installers!!! when a neighbour on the job site approached them instead of just pointing to the number on the truck they actually would phone me from the customers house to give me the info (this was before cell phones kids).
it worked so well some of the other salespeople would ask me how i got the house next door to job they sold last week.
worldās greatest salesman joe girard always left a ābirddog packageā in every car he sold. and mailed one to every client every year (as one of his monthly mailings to every past customer.
) People want to do something because it was their idea. So figure out how to make it ātheir ideaā 
