{"id":18152,"date":"2021-06-21T12:08:09","date_gmt":"2021-06-21T16:08:09","guid":{"rendered":"http:\/\/sp.referralmarketingschool.org\/?p=18152"},"modified":"2022-12-13T14:32:35","modified_gmt":"2022-12-13T19:32:35","slug":"referral-programs-for-small-businesses","status":"publish","type":"post","link":"https:\/\/referralrock.com\/rms\/referral-programs-for-small-businesses\/","title":{"rendered":"Referral Programs\u00a0for Small Businesses: 8 Examples [+6 Software Options]"},"content":{"rendered":"\r\n\r\n\r\n\r\n\r\n\r\n\r\n

Why are referral programs for small businesses so powerful?<\/p>\r\n

Small businesses, just like larger businesses, can greatly benefit from referral programs. By allowing your customer base to market on your behalf, your small business can greatly increase its reach and ROI \u2013 without a spike in your marketing fees.<\/p>\r\n\r\n\r\n\r\n

When we say \u201csmall business referral program,\u201d we\u2019re not talking about an informal program where customers hand out cards to their friends, and you do all the tracking manually. Rather, we\u2019re talking about referrals that come from customers who use an official referral program \u2013 a digital one \u2013 that tracks their marketing for you.<\/p>\r\n\r\n\r\n\r\n

A digital customer referral program (powered by referral software<\/a>) might sound expensive at first. But just because it\u2019s what the big companies use doesn\u2019t mean it\u2019s a huge expense. In fact, newly acquired customers will cover the costs of launching and running your small business referral program \u2013 and then some.<\/p>\r\n\r\n\r\n\r\n

There are several benefits of implementing a successful referral program<\/a>\u00a0for your small business<\/a>. When done right, your profits will grow, and your customer base will become more loyal.<\/p>\r\n\r\n\r\n\r\n

Today, we’ll take a look at how referral programs for small businesses can expand your company, including some successful examples to inspire you.<\/p>\r\n\r\n\r\n\r\n

Why start a <\/strong>small business <\/strong>referral program<\/strong>?<\/strong><\/h2>\r\n\r\n\r\n\r\n

There are many benefits that can come from referral programs for small businesses and startups. Here’s what you can cash in on by starting a small business referral program:<\/p>\r\n\r\n\r\n\r\n

Referral programs for small businesses mobilize and track word of mouth<\/strong><\/h3>\r\n

People are far more likely to trust the word of their friends than a stranger’s word or your company’s messaging. Thus, word of mouth among friends is extremely valuable for small businesses. But this sharing can be unpredictable and hard to track.<\/p>\r\n

Thanks to referral programs for small businesses, though, it’s easy to motivate this word of mouth with referral rewards, simplify the sharing process, and track when your customers refer others.<\/p>\r\n

Small business referral programs promote <\/strong>customer acquisition<\/strong>\u00a0at a lower cost<\/strong><\/h3>\r\n\r\n\r\n\r\n

Do you know how much it costs your small business to bring in another paying customer \u2013 your customer acquisition cost (CAC)? Chances are, this cost will lower when an existing customer does the work for you.<\/p>\r\n

Instead of focusing on people who don’t know you yet<\/a>, you’re focusing on mobilizing customers who already know and love your brand, and getting them to share genuine stories about why your brand is awesome. All this at little to no cost to you.<\/p>\r\n

Yes, with a small business referral program, you pay out a reward<\/a> for a referral, but only when you gain a paying customer. Because the new customer\u2019s business pays for that referral reward, you are only profiting in the process.<\/strong> And since the reward you offer is up to you, you can always keep the reward cost well below your CAC.\u00a0<\/p>\r\n\r\n\r\n\r\n

This method can greatly reduce the CAC for small businesses. Instead of turning to pricey marketing campaigns, your brand can focus on pleasing current customers and allowing them to draw in business on your behalf.\u00a0<\/p>\r\n

Small business referral programs increase customer loyalty<\/strong> through trust<\/strong><\/h3>\r\n

When a customer is referred to your small business by a peer, this makes them more likely to stick around. After all, they trust the word of their friends.\u00a0<\/p>\r\n

Referred customers are 18% more likely<\/a> to remain loyal to your business.<\/strong> Since their friend’s recommendation is so valuable to them, and casts your business in such a positive light, the odds of them enjoying and continuing to buy from your business are far higher.\u00a0As a result, referred customers have a higher lifetime value.<\/strong><\/p>\r\n\r\n\r\n\r\n

Referral programs for small businesses foster a repeat engine of referrals<\/strong><\/h3>\r\n\r\n\r\n\r\n

Another benefit of a small business referral program is the ability to create consistent customer-advocates, leading to even more profits. As repeat consumers gain a reward for their referrals, they become even more invested in your business. They want to see it succeed, they want to keep gaining referral rewards, and as a result, their referrals are genuine. This prompts them to keep referring more customers (both for rewards and to help you), and therefore, continuing to bring in new, loyal customers.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n

Small business referral programs build strong <\/strong>customer relationships<\/strong><\/h3>\r\n\r\n\r\n\r\n

Similar\u00a0to what we described above, a referral reward program builds a strong bond with your customer. They feel comfortable coming to you and bringing their family and friends as new leads. They trust you and they want their friends to join in on the fun, increasing your number of referrals. Plus, they feel more invested in the success of your business.<\/p>\r\n

Strong relationships with customers are vital for any business, but for small businesses, they’re your lifeblood. Customers love the personal care they receive from your small business, value the experience they have with you, and want to play a part in your success. By asking them for a referral<\/a>, your small business gives customers a direct way to contribute to your business growth.<\/p>\r\n\r\n\r\n\r\n

Referral marketing can accelerate the social media sharing cycle<\/strong><\/h3>\r\n\r\n\r\n\r\n

Referral programs have the ability to greatly advance your marketing efforts, especially through online channels. This is where small business owners can really thrive \u2013 especially with social media referrals,<\/a> where customers share referral links to many friends at once.<\/p>\r\n\r\n\r\n\r\n

Social media referral posts give your small business the exposure it needs in order to quickly grow. The friends who see your customers\u2019 social posts might be compelled to share with their own friends, creating a continuous “viral loop” of referrals.<\/p>\r\n\r\n\r\n\r\n

How do I set up a referral program for my small business?<\/h2>\r\n\r\n\r\n\r\n

There are a few steps you can put into place in order to build the best small business referral program possible. Follow these best practices for setting up a small business referral program:<\/p>\r\n\r\n\r\n\r\n

1. Make sharing easy<\/strong><\/h3>\r\n\r\n\r\n\r\n

The easier it is to share via your referral program, the more often your business will be shared. It\u2019s as simple as that.<\/p>\r\n