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Creating a recommend a friend scheme for small business

February 24, 2012

A recommend a friend (or refer a friend, or introduce a friend, whichever lingo best suits your business) is a great way to generate warm leads for small businesses that can provide a truly personal customer service approach.

I recently worked on one for The Business Octopus and have compiled the following list of considerations before you strt following my experience.

1. Do you have a good enough mailing list and database?

Your list of contacts will be at the core of your recommend a friend scheme, you need to be collecting customer names and email addresses at the point of sale be it through your online, telephone or face-to-face channels. Sticking these in an Excel Spreadsheet on your local hard drive isn’t good enough, you need a robust database which you can easily transfer the data from and you need to know which contacts you should be contacting and when.

2. What incentive are you going to offer?

While some of your customers will be so impressed with your amazing business that they’ll happily recommend you for free, most won’t bother unless there’s something in it for them (such is the way of the world). You could just offer straight-up cash but a gift card for a popular high-street store looks a bit more professional on your marketing and when it arrives through their letterbox. Pick yours carefully, make the brand of the store match with the brand of your business. Finally is it a one-way incentive (just for the referer) or two-way (for the referee too), for The Business Octopus we are trialling the former for a month then moving to the latter and monitoring the difference in uptake.

3. Your e-mail marketing system

Whilst it’s possible to send out an email crammed with addresses in the To: field, it’s really not advisable, it looks unprofessional and you will be breaching your customer’s data protection by giving all your other customers their email address. So, use a professional email marketing solution that can connect easily with your database. My personal preference is DotMailer, but there are others such as MailChimp to try.

4. Designing your initial email

It’s good practice to email a new customer to welcome them to your business once a sale is completed, it gives confidence to the customer that your after-sales are as good as your sales. It’s even better practice to include your recommend a friend incentive in this email too. Programs such as DotMailer make it easy to create professional looking emails that will work across the majority of email platforms with minimal fuss.

Ask yourself the following:

  • Are you going to use HTML or plain text emails?
  • Do you need to hire a web designer or developer?
  • What is the next step for the customer once they receive the email?

5. Designing the friend referral process

Perhaps the most important thing to consider is how the friend referral process will work in practise. For this project the customer is going to:

  • Click on a link in the email which will bring them to a landing page on The Business Octopus website
  • From there the customer will fill in their friends details on a simple web form
  • This will trigger a second email to the referred friend
  • The referred customer can either call direct for a quote and quote their friends reference number OR go to a second landing page and request a callback. It’s always better to offer multiple routes to market.

Once the referred customer has completed their transaction it is imperitave that your business is set-up to deliver the incentives in a timely fashion, if you don’t and the referral is lost it could have a damaging impact on your brand reputation, quite the opposite of what we are aiming for here.

6. Make the process as slick as possible

Don’t make your customer work too hard for their incentive, avoid unnecessary terms and conditions, offer multiple channels for them to refer their friend and make the process seamless.  For example when the customer hits the first landing page most of their information is already pre-populated on the form, all they have to fill in is their friend’s email address.

If you get all of this right you should be well on your way to a successful recommend a friend scheme, I’ll update this blog with the results of this one, please let me know your thoughts, ideas and success stories for your own schemes!

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