What is a referral programme?

In a nutshell, customer referral programmes incentivise your customers to spread the word about your company, product, or service, ultimately bringing you more business. It does this by giving those that advocate for your business a reward in exhange for their loyalty. This can be anything, but usually falls into one of the following categories - cash, cash equivalents (i.e. gift cards), a free product/service.

Referral programmes give structure to this concept, providing systems and processes to make sure your programme is effective, maximising its return on investment, while minimising the effort to run it.

Why start a referral programme?

What’s in it for me?

short answer: more high quality leads for your business at a lower cost of acquisition

long(er) answer 👇

Referral programmes are ‘pay-on-result’ by nature.

When purchasing leads from a lead gen agency, or running paid ads, the cost scales up with the number of leads you are purchasing, or reaching. Whereas with customer referrals, you get to determine when a referral is complete, and have the power to only pay out an incentive once your product or service is fulfilled. There is no consequence of a lead registering interest, but not converting

New leads that come in through your referral programme are primed for a sale

In other words they’re a much warmer lead than those you might be cold pitching over email, DMs or calls. Social proof is key for buying decisions, especially high ticket ones, and I can’t think of stronger form social proof than a word-of-mouth endorsement from a trusted friend, colleague, or family member

Referral programmes reward high quality services and products

Referral programmes don’t work if you don’t have a product or service worth sharing. Chances are, you already have a good product or service, maybe you have great reviews, testimonials, or even have a trickle of word of mouth referrals coming in organically. Referral programmes give you a way to channel that positive sentiment in a way that results in a concrete lead on your contact list, as referral programmes both make it much easier and more rewarding for your advocates to take action

How do I start my own referral programme?

Referral programmes require you to have a system to keep track of the different components - namely: your referrers (aka advocates), your referees (aka leads) and your reward payouts.

Method 1: Manual Tracking Document

For maximum control and customisation, you can create your own tracking document. Spreadsheet based software is likely the most appropriate as you can take advantage of formulas to create totals and run other calculations on your figures.

If you go with this approach, you will need a deeper understanding of the components of a referral programme which is not in scope for this article.

This approach is good if your business or desired referral programme strategy is very unique. Otherwise, I would recommend going with the free Notion template discussed next.

Method 2: Free Notion Template

Click here to get the free referral tracker template

I have a full YouTube video walking through the usage of the free Notion template, linked here and also embedded at the top of this article. I recommend watching the video for the best experience, especially if you are new to Notion.

If you are a more hands-on learner, feel free to dive straight into the template, as it contains written guidance at the top of each section.

To summarise the key aspects of the template (you can skip this if you plan to watch the video):

1. Setup checklist

   The setup checklist covers the initial steps you need to take to prepare your programme. These steps are essential before you start onboarding referrers to ensure you have a clear strategy in mind. If you wing it, you may well still be able to run a successful referral programme, but it will certainly make things more challenging and prone to errors.

   The checklist covers things like deciding on what rewards you want to payout for successful referrals, and how you will collect lead contact details.

2. Referral journey

   A drag and drop ‘kanban’ style board, where you can track individual referrals through the referral process.

3. Pending payouts

   A tabular view showing the Payouts currently due, this is determined automatically by a referral status of Converted Sale and a reward status of Not Fulfilled.

4. New leads to follow up with

   A tabular view showing new leads in your funnel which you’ve not engaged, complete with their contact details.

5. All referrals

   An unfiltered tabular view to give you a full overview of your referrals, regardless of status.

6. Fulfilled payouts

   A tabular view of reward payouts you have already fulfilled.

Method 3: Dedicated Referral Programme Software

Last, but certainly not least, you can use a dedicated customer referral software. Using a purpose built software like YoRefer provides a big improvement in the Referral workflow, making it both easier to manage your referral programme, as well as give you more functionality than what’s possible with the other methods.

This includes:

1. Hosting your referral programme and providing you a dedicated subdomain handling attribution via unique referrer codes e.g. yourcompany.yorefer.com/join/?ref=1234abcd

2. Automating the sign up process and tracking of referrers and leads through the referral lifecycle

3. Reward distribution and unique offerings. For example, YoRefer has an option for pick and mix digital giftcards, where the recipient can split their reward value across gift cards from hundreds of household brands in the UK

4. An intuitive referral programme editor, which allows you to quickly customise your programme and make it your own, matching your branding with minimal time and effort without needing any coding or technical skills

If this sounds like the best option for you, lets chat! Send an email via my contact form, or book a live demo today using my calendar link