The Hostway Blog

Ideas on Creating an Online Referral Program

Customer referrals are a critical element in growing your small business. Business owners must come up with creative incentives for referral programs to encourage client participation. One of the best places to post referral program rules is on your company Web site. Online referral programs are simple, inexpensive and more effective than mailers or simply printing program guidelines on the back of a business card. This is not to say that you shouldn’t include the fact that you have a referral incentive program on printed materials—simply that your Web site is a prime platform for getting the message out.

Active Customer Opt-In

In the area of your Web site where the referral program is laid out, create a hyperlink where interested customers can sign up to receive a referral code. They will then give this unique identifier out to those they refer to your business. Tie the code to a discount for new customers, such as 10 percent off product and service. When the referral customer uses the code to get the discount, you will know which current customer referred them and be able to reward him with something of greater value—typically 50 percent off of his next purchase or a dollar amount off.

Contest with a Twist

Top-tier customers offer the best pool from which to earn referral business. Invite these top customers to a competition over a period of time. For example, the customer who refers the most new prospects to your Web site over a two-week period will receive a $25 gift card or a certificate for a popular restaurant. On the Web site, be sure to include an area for the new customers to input their information including who referred them. Instructions should give them some sort of incentive for revealing who referred them, such as a discount on products.

Printable Referral Coupon

Another idea is to create a printable referral coupon for your Web site. The coupon should offer some sort of discount for new customers doing business with you for the first time. Include text that encourages current customers to print off several coupons to hand out to friends and business acquaintances. Make sure to include a space somewhere on the coupon asking, “How did you hear about us?” Customers printing off the coupons can write their company name there, and random visitors to the Web site can put something like “Internet search” in the spot before they turn in the coupon.

Things to Consider

Set a measurable goal for your referral program so you can see which incentive is most successful. For example, you can set a goal of a 15 percent increase in referral business over the next two months. Take the time to send handwritten thank-you notes to your customers who give referrals that result in new business. Customers will feel good about sending business your way and will appreciate the effort to send a letter by U.S. Postal Service — a veritable rarity nowadays.