How to Create a Great Referral Program That Delivers New Clients
A great referral program will result in new clients for any salon owner. They are very effective in building a business, and according to an article published in Forbes Magazine, 60% of marketers say that referral programs generate a high volume of leads. Sadly, many salon owners either don’t have a referral program or their program is poorly executed. If you want to learn more on how to create a great referral program that delivers new clients, keep reading.
What Happens in the Real World
Many of our business owners at bello refer their clients to other professionals here at bello. If you’re in a suite, consider partnering with other professionals at your suite location to develop referral programs to “cross-refer” clients to your business and other businesses.
How Everybody Wins with a Referral Program
One of the reasons that great referral programs are so effective is that they create a win-win-win situation for everyone involved. Here is how:
Your Client Wins
There is typically an incentive or award for the referral. There are many different types of awards that your client can enjoy just for referring a friend.
The Referral Wins
Your new client’s award is the service you offer and the new-found confidence they gain from looking and feeling their best.
You Win
Not only do you get a new client and make more money, but you also get fresh content for social media posts that promote your brand.
Client referrals are among the most sought-after forms of advertising. That’s because people trust recommendations from friends and family members. Having a new customer who is already trusting and comfortable before they ever set foot in your salon puts you at an advantage. Best of all, according to Harvard Business Review, in an article published on the Clutch website, referred customers are 18% more loyal than customers acquired in other ways, like paid advertising or social media posts.
Types of Referral Programs
Referral programs can vary in structure. Common types include:
Monetary Incentives
Monetary Incentives are cash awards for referrals, like paying $50 for a referral. Cash awards are popular with the referring customers. After all, who doesn’t like a little cash prize? But the cost to you and the value to your customer is the same. You don’t get the opportunity to offer big value to your customer with little hard cost. cash awards for referrals, like paying $50 for a referral. Cash awards are popular with the referring customers. After all, who doesn’t like a little cash prize? But the cost to you and the value to your customer is the same. You don’t get the opportunity to offer big value to your customer with little hard cost.
Discounts
Offering discounts to the referrer and referee is another type of award. These are nice, and everyone likes to save money. But, the impact of these awards is not as great as a monetary incentive, experience, or product award.
Experience Awards
Experience awards are popular because people love experiences. Therefore, gift cards to local restaurants and attractions are always popular rewards. If you decide to use experience rewards, we recommend asking for a discount on each gift card with a bulk purchase. That will keep your hard cost down.
Product Awards
Giving exclusive products to clients who refer business is our favorite type of award. This award makes people feel exclusive and special. Clients will relive that special feeling every time they use the product. We recommend attending a trade show and buying high-end products only sold at the show. That will make the product exclusive. Take advantage of the show discount and drive down your unit cost. Then, display the product in your salon with a sign that says it’s only available through your referral program. Not being able to buy the product may prompt a customer to give you a referral. Give it away to referring customers and they will feel part of an exclusive club.
Each of these awards has a cost, so it’s important to determine the value of a new client before deciding how much to award.
Tips on Referral Program Success
1. Offer Multiple Awards
People respond to awards differently. Some people prefer cash, while others prefer gift cards or products. By offering a choice of awards, you can appeal to more people and increase the chance of getting a referral.
2. Create a Poster for Your Wall
Once you create a referral program, create a poster or placard for your salon wall. You don’t have to point it out to your customers. They will read it and make a mental note. If you decide to talk about your program, you can use it to ensure you don’t leave out any details.
3. Provide a Small Reminder Card
Have little cards made that describe the program and hand them to your clients on their way out. You could use the back of it to write down their next appointment. It’s a nice reminder of both.
4. Promote on Social Media and Email Blasts
Use social media and email blasts to promote your program. And, remember to use these platforms as proof of performance. When you get a referral, snap a picture or record your customer receiving the award. Post it as proof that people really get awards for referring friends and family. This will keep your program front and center and remind your followers of its benefits.
Conclusion on How to Create a great Referral Program
A great referral program will result in new customers and grow your business. If you don’t already have one in place, now is the time to create a referral program. If you have one, it’s the perfect time to make sure you’re taking full advantage of the growth opportunities it provides. First, decide which awards you will offer and promote your program through social media and email blasts. Then, start asking for referrals. If you’re uncomfortable about asking for referrals, stay tuned for our next blog, where we will provide tips on how to ask for referrals effectively. Helping you thrive in your salon business is a goal of bello Salon Suites. We are here to support your business every step of the way and want to see you and your business thrive.
bello Salon Suites is a collection of 83 custom, private studios for hairstylists, barbers, and beauty professionals in Sacramento, California. Privately owned and locally based, our facility features four stylish lounges and an outside garden for a truly zen-like experience. On top of that, we offer more amenities, like complimentary towel and cape service, than any other salon suites company in town. Our amenities and support are just two of the reasons we are the first choice for hairstylist suites for rent in Sacramento. Take a tour today and see for yourself. For income potential, perks, and value, nothing compares to bello.
