Start a Utility Referral Program: Best Practices and Tools

Everyone’s offering the same utilities, so marketing your utility company can be tough. What if I told you there’s a way for your company to set itself apart from the pack? People tend to make decisions based on what their friends and family recommend. So, if you can get lots of customers to recommend your company, you’ll have a marketing edge. 

As long as you’re delivering a stellar customer experience, recommendations aren’t as unpredictable as you might think. There’s a way to mobilize referrals by starting a referral program – and as an added bonus, you’ll make all your referrals trackable. Here are our top tips for starting a utility referral program. 

What is a utility referral program?

A utility referral program is a streamlined way to encourage customers to suggest your utility company to others. These programs help utility companies expand their reach and connect with a specific audience. Current customers, often homeowners, are invited to recommend the company to their friends and family, earning rewards whenever one of their referrals turns into a new customer.

Benefits of utility referral programs

Let’s take a look at some of the main benefits that referral marketing programs offer to utility companies:

They leverage social proof and trust: Many consumers tend to ask friends for advice before switching utility companies. When a potential customer gets advice in your company’s favor from a reliable friend, they are much more inclined to switch with confidence. 

They give your company a way to stand out: Utility services can be hard to market. Fundamentally, all utility companies are supplying the same natural gas, water, or electricity – the product’s pretty much identical no matter which supplier someone chooses. Plus, it’s become much easier for people to shop around and compare prices on different utilities, and pick a supplier just because it’s cheaper. When customers vouch for your service, that sets you apart from all the other companies you’re competing with – and often keeps people from shopping around.

They enhance your reputation: By providing incentives for customers who refer others, you motivate them to share their positive experiences. This could be through conversations with friends and family or posts on social media, which broadens your audience. As a result, more people have a positive impression of your company, and your image gets boosted.

They are more cost-effective than traditional advertising: Customer acquisition costs tend to be high for utility companies, and can sometimes account for a quarter to a third of your total costs. Referral programs typically require less investment than traditional ads, and yield better results. You’re focusing on your existing customers, making it a wise investment.

They involve minimal risk: Although there is an initial investment in referral software, you only pay when a sale occurs. If there are no sales, you don’t face any costs.

They encourage customer loyalty: Thanks to the power of social proof, referred friends are not only more likely to choose your utility company, but are also 18% more likely to stay loyal to you over time.

They can lead to viral growth: When one customer refers a friend, that friend may also pass on the recommendation to others. This kind of word-of-mouth marketing can create significant growth for your business.

They are easy to track: By establishing simple key performance indicators, such as the number of referred customers and revenue generated from referrals, you can effectively evaluate how well your referral program is performing.

Referral software for utility companies [Free Tools]

These referral tools for utility companies are a free and easy way to help you start your referral program.

Want a fully automated referral program for your utility business? Run your referral program with us at Referral Rock. Find out how we can build your program with you (and tailor it to your unique needs)

Before you start

When setting up a utility referral program, there are several important factors to consider. Firstly, it’s essential for your company to have standout customer service. The utilities you offer are the same as competitors offer, so service is where you’ll stand out from the crowd. Are you getting high scores on customer satisfaction surveys?

Next, check that you have a solid customer base already in place. A referral program won’t thrive without customers to kickstart it. Ensure you have a substantial list of existing customers who are enthusiastic about recommending your services to others. If people give you five-star reviews, or recommend you outside of the referral program, they’ll probably be enthusiastic about recommending you for a reward.

It’s also crucial to have a good understanding of these customers. Think about how you will approach them regarding the referral program and what incentives will encourage them to make referrals. Additionally, consider which platforms your customers are most likely to use for sharing recommendations.

Another vital aspect is to establish a clear branding and marketing strategy. If you’re asking customers to promote you, you should already have a compelling message and campaign in place. What key points do you want them to communicate about your brand? Why should they encourage their friends to consider switching to you? And what unique qualities set you apart from other providers? (Usually, this will be in the customer service you provide.)

Utility referral program best practices

Now that you know you’re ready for a referral program, follow our best practices to maximize your growth:

Choose the right rewards

Rewards are the driving factor that will get someone to refer you, so choose them carefully. Gift cards are the most popular utility referral reward as they let a referrer spend the money however they wish – and Amazon and Visa gift cards are the most popular as they’re nearly equivalent to cash. Cash itself is another popular referral reward, but make sure you’re able to offer it. 

You could also give credits towards a referrer’s next utility bill – people will appreciate the savings and gain a reason to both share with friends and keep relying on you for their utilities.

As a way to motivate lots of referrals from power sharers, you might also try a tiered structure. This kind of reward structure pays out rewards that increase in value as people make more successful referrals.

You might also pay out rewards based on household size, or bigger rewards for referrals of business customers vs. residential customers, so referrals for more expensive contracts net someone more money.

Be sure to reward the referred friend as well, as that will encourage them to switch to you for their energy needs. Cash or energy bill credits are best in this case as they offer instant savings, but gift cards also work. 

When to pay out these rewards? This should be when the friend signs their contract or pays their first bill – when the referral results in money in your pocket.

Check marketing regulations in your state or area, as some jurisdictions might restrict what you can offer as utility referral rewards.  

Ask for referrals at the right times

To effectively gather referrals, it’s important to ask for them at the right moments. Reach out for referrals when your clients are feeling satisfied and you’re still on their minds, such as when:

• They just renewed their contract
• They’ve given you a glowing review  
• They’ve posted a positive comment on social media  
• You’ve received enthusiastic feedback during an in-person chat  
• You’re sending an invoice and you know they’re satisfied
• You know they’ve already recommended your services to others outside of your referral program

Streamline access to the program

Make sure your referral process is easy to navigate for both current and former customers. They should be able to access the program and share it with their friends with just a few clicks or taps.

With Referral Rock’s One Click Access links, users can quickly start promoting your business. These links allow them to join the program automatically, eliminating the need for sign-ups or form-filling.

Remember to include One Click Access links in all your promotional emails regarding the referral program. This applies to newsletters and transactional emails, not just those specifically focused on the referral program.

Additionally, Referral Rock enables both new and existing members to log into their referral portal using popular social media accounts like Google and Facebook. This simplifies the process since they won’t have to remember a password.

Make sharing super-simple

When people arrive at the referral page, it should be clear what to do next:

• Create an engaging headline that clearly states what customers should do (share) and emphasizes the benefits for them (the reward).
• Summarize the program and the steps to earn rewards in a few easy-to-follow points.
• Include a prominent call-to-action button that motivates customers to start sharing.
• Direct customers to an FAQ page for any further inquiries they may have.
• Provide multiple sharing options that fit how customers usually share their favorite things with friends, such as email, social media, and a unique referral link they can easily copy and share

Promote your program in multiple locations

You’ve put a lot of effort into developing your referral program, but it won’t be effective if your customers don’t know about it! To boost sales, it’s crucial to promote your program. Here are some great ways to do that:

• On your website (think about adding a striking hero image or banner for better visibility, along with buttons in both the top and bottom menus)
• Through mass emails focused on your program, sent to all your clients (we suggest doing this monthly to quarterly)
• In your payment portal, if you have one
• In your app, if you have one
• With engaging posts on social media
• During chats with customers, especially when they express satisfaction with your service
• In personalized referral emails to your happiest customers
• In newsletters, confirmation emails, billing notices, and other communications that aren’t solely about your referral program
• In your email signatures and social media bios

Pick the right referral software

Choosing the right referral software is essential for the success of your referral program. Software lets you effectively track where each referral originates, and quickly reward those referrals that result in successful outcomes. Additionally, the software collects valuable insights that allow you to evaluate your program’s effectiveness and implement enhancements for improved results.

Referral Rock stands out as an excellent choice for those seeking top-notch referral tracking, sharing, and engagement features.

With Referral Rock, you can:

Effortlessly monitor referrals: Each participant receives a unique referral link, allowing you to pinpoint the source of every referral. Customers can also view their own referrals through personalized dashboards.

Automate your marketing: Keep your customers engaged with strategic, automated promotional emails, and make sharing easy with passwordless links.

Tailor and simplify rewards: Create any reward structure you desire, including tiered and multi-step rewards, and automate the payout process.

Integrate with key tools: Connect Referral Rock seamlessly with over 50 different applications, including your CRM.

Obtain program insights: Quickly assess your program’s performance and make data-driven adjustments.

Get started quickly: With Referral Rock, you can launch your program in just a few days, with expert assistance available throughout the process.

Create your own utility referral program  

Launching a utility referral program can be an excellent way to draw in new clients and grow your business. By leveraging the power of word-of-mouth marketing and motivating your current customers to share your services with their friends and colleagues, you can create a reliable acquisition channel that often proves to be more budget-friendly than traditional advertising.

To set up a successful program, it’s important to select the right rewards, promote your program regularly,  and make the referral process as straightforward as possible. Using software will help you with this process, and it’s easier than you might think!