Customer Referral Programs-Talk to me!!

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Rozmataz

Rozmataz

SGF, Supreme Grumble Framer
Joined
Jun 13, 2002
Posts
2,773
Loc
Fingerlakes Region of NYS
We are working on a customer referral program that I uncovered when I was researching the opening of my business. It provides an existing customer with a referral certificate to give to someone for custom framing. That person gets a $15 discount off a purchase of $60 or more (this is all open for discussion!)... the customer that referred the new customer then receives a $20 gift certificate good towards custom framing. Since I also sell gift items, etc... I am offering this only on the custom framing...

Do you think this is a smart program to offer or would you have suggestions for others...

I am already getting customers because of referrals and want to offer a thank you for that..

Coming up on my 1st year anniversary and want to continue to target market rather than as much print advertising... since Yellow Pages has already brought some new business!!

Thanks, Roz
 
Worse case senerio customer gets refered gets a $60.00 frame job done or just $60.00 worth of mats. take 60-15=45 45-20=25 say the refer customer only gets 20 worth of work done you just did $25 in business?
 
If a customer sends me a new client, I mail them a $10.00 gift certificate and a big thank you! They LOVE it! Honestly, I know they love the big thank you as much, if not more, than the $10. Personally, I think you are going way overboard. You may be defeating your purpose.
 
We are about to implement a referral program our selves. We will print biz cards with our clients name on them and our logo. Their title is "customer referral specialist". the new client gets $10.00 of and the specialist gets a $10 gift cert sent.
 
I created a postcard mailer called "Best Friends". "A Gift For You And Your Best Friend!" The receipent (and the "best friend") would get x% off a framing order when they bring in a "best friend" and they both place orders. Offer limited to 2 "best friends".

Betty
 
Hi Betty-A suggestion on percentage off-Focus groups here have found that nobody gets excited over percentages less than 30%, and most expect more, much more (Can we think on Michael's at 50%). 10 or 15% won't get much activity according to the research done here.

I don't think $10 will get much attention, either. If you assume an average sale of $150 to $200, ten bucks represents 5 to 7 1/2 %. Once again, most folks won't walk across the parking lot for $10. I would start higher if you want to drive some business. A few qualifiers wouldn't hurt, either. Just make sure your regular prices can sustain a small reduction in margin.

[ 01-28-2003, 05:19 PM: Message edited by: Bob Carter ]
 
This is interesting, it sounds like a good idea for a new business.

We get a lot perhaps most of our new customers from referals of existing customers. We do not do any sort of discounting or coupons in this regard. Yet we continually get new customers based on referal.

If you did not give an existing customer an incentive would they not refer you? My gutt tells me they would recomend your services if they had a positive experience. I also feel that there are as many customers turned off by this sort of gimmick as those who love it.

I do think a personal "thank you" is always welcomed and appreciated in any form. Especially without strings attached.
 
I call that word of mouth advertising. Once you start discounting won't it always be expected? I'd rather give the good customer a gift of a frame job when they least expect it and it will be very much appreciated.
 
Since I am waaaaay off the beaten path, and do an awful lot of "on site consultations", my hope with my "best friend" program was to increase traffic to the shop. The promo was only on orders placed here when the customer and their "best friend" came to the shop.

Thanks Bob for the reminder about percentages. Always gotta check the numbers!

Betty
 
If you want to increase traffic, why limit it to two best friends? I would think you would be thrilled if someone pulled up in front of your shop with a bus filled with "Best Friends", aquaintances, relatives, fellow employees, and Daughters of the Revolution.

Also concerned if the "Friend" is coming along only for the savings and not the service and selection. I wonder if they will respond to any framer's coupon or discount. I do like Sherry Lee's idea.

It's funny, when we have a customer bring a friend in with them the first thing they tell them is "he's the best" or when we give them the price for the order "It's worth it, I spent $$$ on my order, but it's so beautiful." We all need more "Friends" like that.
 
I do understand what you're saying Vincent, however we all know the perceived value that something "limited" has. Also if there is a discount/gift of any type attached to the offer, one must be careful of the costs attached as well.

On the other hand, what's to keep the new customer from receiving a "best friends" card in the future? As Bob said (and always says) we gotta watch our margins.

By the way, I once saw a customer's daughter out away from my shop and she introduced me to a friend of her's as "my Mother's 'personal framer'!"

Betty
 
Before I moved two blocks to an apparently more visible location, nearly 100% of my new customers came from referrals by existing customers.

The new customer always got my gratitude and the best service and quality, but no discounts or coupons. The referring customer got a personal note of thanks, a little chatter about how much I enjoyed meeting their friend/relative/coworker and a token credit, which is automatically applied to their customer records and will turn up on their next order. Usually it would be $10.

Customers who love you will talk you up to their friends. It's nice to acknowledge that, but I don't think you really have to pay for it in cash.
 
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