If you are like most shop owners today, you have one thing on your mind, growing your business. More customers, more sales, more profit. But where is this pool of customers just waiting to be tapped?

You've tried advertising, social media, special events, sales, and promotions but haven't yet moved the needle. 

 How about asking your most committed customers to refer their friends and family?

 Sounds like a plan.

 Benefits of customer referrals

Based on a recent study, 94% of customers will recommend a company whose service they rate as "very good." The Wharton School of Business found that referred customers have a 16-25% higher customer lifetime value. According to Deloitte, referred customers are 37% more likely to remain loyal to your business. 

Finally, referred customers can help you build stronger relationships with your existing customers. What's more, these customers cost little to nothing to acquire.

All it takes is the courage to ask.  

How to ask for a referral?

Before you begin work on your pitch, do some homework. As you start creating your referral program, there are some important questions to ask yourself. 

What do you want to get out of a referral program? Is it about growing your business and making more money? Set your goals.

How are referrals coming into your business today? Or are they coming in at all? How much is a referred customer worth? How will you incentivize customers who bring you a referral?

What makes a good fit for a customer referral? Identify what an ideal customer looks like. Create a list of possible referral sources.

Now it's time to make your pitch.

You've identified a list of customers you believe would make good advocates for your business. Will you email them about your program, including details of the ideal referral, a testimonial or two, and the incentive? For example, offer a $15 credit when your advocate refers a friend and a $20 credit when the referred customer signs up. Will you offer a points-based rewards program to keep old customers and their referrals engaged?

Spread the word.

Promote your program beyond an initial email through your website, newsletter, social media platforms, and a tabletop display or handout. When you've spread the word, you need to track the progress of your program. Who was referred, and who referred them? When did they sign up? How will you follow up? Keeping track of your program allows you to measure your success and make changes as needed. 

But don't forget the most important step in creating a successful referral campaign – say thank you. Thank you to the advocate, and thank you to the referred customer. Finally, don't wait too long before you start the process all over again.

Since 2005, Quikstone Capital Solutions has proven to be an honest, transparent, and trustworthy advisor specializing in small business funding. Check out our ROI Calculator to see how much your business can profit from a Merchant Cash Advance from Quikstone. To learn how Quikstone can help your business grow, contact us today.