Keys to creating a winning referral program
According to a recent survey done by Accounting Today, client referrals are still the number one source of new clients for tax preparers. Do you currently offer an incentive to your customers for referring friends or family? If so, are you awarding them with the right amount? Here are 3 tips that can help you boost your client referral program:
1. Reward both the referring customer and the referred client
One way to accomplish this is by using business card-sized coupons. These typically would include the dollar amount that is being discounted, the services or products that you are discounting, the expiration date for the promotion, and any other terms & conditions. You would also want to include a blank field for the name of the customer who will be using the coupons to refer new clients.
As an example, you could advertise a discount offering $30 off tax preparation services to referred clients with a coupon that’s good through April 1st. As a token of gratitude and to incentivize your existing customers to make more referrals, you could reward your referring customers with a $50 gift card per referred client.
Alternatively, you can always get more creative and hold a sweepstakes at the end of tax season during which referring customers can use the referral coupons that they’ve earned to enter.
2. Make your referral incentive an enticing offer
Inviting a customer to provide a referral is asking them to actively promote your business so it’s important to reward their efforts accordingly. To set the right incentive, it is critical to know the “Lifetime Value” of each new client.
For example, if you charge $100 to prepare a tax return, and you retain each new client for at least 3 years, the “Lifetime Value” for that new client is $300, which makes it easier to justify the $50 incentive mentioned above.
3. Offer an incentive for posting an online review
Referrals come in different shapes and sizes. Nowadays, a positive online review can generate far more referrals in less time than referrals made by word-of-mouth. Why not offer a ‘thank you gift’ to customers willing to post an honest review of their experience with you?
To make it easier for customers to leave a review, you could set up an iPad in your waiting area for customers for the sole purpose of leaving reviews. If that’s not an option, print posters or brochures with a step-by-step guide detailing how to find your business on Google and submit an online review in return for a reward.
It’s time to get serious about referrals
Consider all three of the above mentioned methods to increase your exposure and heighten your business reputation. Building a steady pipeline of warm referrals is not only profitable, it’s your most formidable form of marketing.
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