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    7 Replies Latest reply on Oct 6, 2008 4:41 PM by iventures

    Word-of-Mouth Marketing: Offer Incentives for More Referrals

    iventures Adventurer
      Use your creativity to develop an incentive program that will reward referrals. People like to give referrals and they LOVE to be recognized for giving referrals. And, incentives are one of the most powerful methods of generating more of them.

      Incentives can range from gift certificates to purchase discounts to cash payment based on business generated.

      The wonderful thing about an incentive program is that it feeds into people's innate desire to help each other. It is rewarding to know an effort has been successful. Be sure to let your contact know when a referral he or she has made comes through.


      I've found a gift certificate to be much more memorable than a cash incentive. The reason is simple - these kind of rewards make people feel special. Finding the right incentive can be a challenge, but it's worth it. You will score big by really building your word-of-mouth business.

      You'll be amazed at how the action of showing appreciation can generate good will and additional referrals. Once a person gives a referral, they become much more likely to continue to refer people your way. As soon as someone sends you a referral, immediately send them a thank-you gift. A card or quick phone call is the bare minimum.

      On the flip side, if a person refers someone to you but gets no recognition or appreciation, he or she probably won't say anything to you. But, the person is likely to make a comment to a co-worker, friend, or spouse: "Can you believe I didn't even get a thank you!!!" more referrals from that source.

      ACTION ITEM: Consider your current referral program. How are you generating referrals? What could you do to create a Referral Incentive Program for your business? Developing a referral program now will save you a lot of time later. By encouraging a steady stream of word-of-mouth advertising, you will find you are getting more pre-qualified leads - a groups that is much more likely to make a purchase
        • Re: Word-of-Mouth Marketing: Offer Incentives for More Referrals
          iventures Adventurer
          Typically, salespeople will make one of three mistakes when giving incentives:

          • The incentive is not an incentive, it's a bribe-a sizable chunk of money, at least in relation to the cost/value of their product or service, in the hopes of getting referrals.
          • The incentive is not an incentive, it's a come-on-it is nothing more than a discount for their own products or services which many clients see as nothing more than another way for the salesperson to get more business from the client.

          • The incentive has limited appeal. For instance, they'll give a $10 gift card to Starbucks or coupon for a car wash. That is, an incentive given to everyone, but with limited appeal.

          Incentives need to be just that-an incentive, something that encourages people to give referrals, not a reward, not a bounty.

          What does an effective and reasonable incentive look like? VISIT US:
          • Re: Word-of-Mouth Marketing: Offer Incentives for More Referrals
            iventures Adventurer
            Because promotional products help encourage customers to provide you with the names of friends and associates whom you can contact in the future. A 1993 study by Baylor University found that customers who recieve promotional products are more willing to provide these leads than customers who don't recieve promotional products.

            This study was conducted with 20 Mary Kay beauty consultants, half of whom distributed promotional gifts (imprinted lint removers) to customers; the other ten offered no promotional gifts. Both groups then asked customers (200 in all) to refer the names of acquaintances. Findings are presented below.

            • Customers who recieved a promotional products were 14% more likely to provide leads than those who did not
            • Salespeople who gave promotional gifts to their customers recieved 22% more referrals than salespeople who did not use promotional products.
            • 40% of the salespeople who used the gifts commented on how well the gifts were recieved by their customers. These comments were not required, and were written on the data forms used in the study (in a space provided for comments ).

            Providing promotional gifts to customers increases the likelihood of them providing your salespeople with business referrals, and increases the number of leads generated. Used within a one-time promotion to expand your customer base, or as an approach to insure the continuous growth of your business, promotional products are effective tools.