A referral programme is essentially a type of word-of-mouth advertising where your current customers refer others to your business. As long as you value and incentivise your customers, they will continue recommending your business to others and bringing in fresh faces. This free advertising allows you to cast a wider net in your search for new customers.
Referral marketing incentivises your existing customers to onboard new customers to your business. How you reward your customers could range from a percentage off their next purchase, a gift, or even store points for both parties that go towards their next purchase.
Many businesses can benefit from a referral program.
Here are three main benefits that will get you thinking about whether you should introduce a referral scheme for your business.
1. The right type of leads grow your business
As a business, you might spend a lot on marketing to your target market. But, because of that, you might overlook other segments equally interested in your product or services. In that way, a referral program gives you access to a pool of potential customers that may not have been looking for what you offer.
For example, banks are well-known for using referral programs to entice customers to invest or save with them. Even food delivery companies such as Grabfood and FoodPanda provide a discount when customers refer their friends to sign up for the service.
Since your existing customers are referring to their family or friends, they are more likely to purchase the product or service. So the leads that are generated from a referral program are more valuable, reducing your time and cost in generating new leads that may or may not convert into sales. Which brings us too…
2. Increasing sales and marketing effectiveness
A referral program can help generate more revenue per customer because each one will bring in additional sales from their referrals and purchases. This means that each new customer will be worth more than if they had come directly from an advertisement or promotional campaign.
They’ll also be more likely to make repeat purchases because they feel like they’re part of something special when referred by someone who already loves your company!
Another industry that also commonly uses referral programs is telcos such as “Singapore’s Best Telco” Circles Life. They are increasing their revenue per customer by giving free data for new sign-ups via referrals. This makes it cost-effective for them to grow their business without advertising.
Once referred customers that have a good experience with your company, will be more likely to refer others and continue doing business with you long into the future. In addition, referral programs help create better relationships because customers who refer friends to you will feel like they’ve played a part in your business success.
3. Improving customer satisfaction and loyalty
Strong customer relationships for any business are essential, but they can mean everything for a small business. Loyal customers refer their friends because they trust your small business, feel appreciated as individuals (rather than just being a number), and want to contribute as part of your community.
Customers who come from referrals are usually ready to purchase since someone they trust recommended the business.
This viral effect cannot be understated, as new customers may need a lot of information and convincing to convert into a loyal customer, having been referred, their foot is already through the door.
Therefore most referrals come from people who have used the product themselves and had a good experience, making them more likely to return. If you have enough returning customers, you will also start seeing a higher lifetime customer value as they recommend you more often.
Take, for instance, Qashier’s own Partner Referral Program. Signing up is free, but our existing clients benefit from earning commissions when they refer to new customers. Besides, they’ll get to join in our SME-related activities. This suite of benefits creates a strong brand loyalty as clients feel rewarded by helping you recommend your business.
Referral programs with Qashier smart POS
Having created a promotion, you’ll want to be able to key in the right discounts or incentives for your customers immediately. A smart POS system will help you with that.
Whether you use Qashier X1 or Qashier XL, our Qashier software-only solutions, we will allow you to create the right discount in the system. That way, when customers show that they are purchasing the good or service via a referral code, your staff can easily add the discount to the final total.
Moreover, our terminals with built-in receipt printers allow you to generate a QR code on the receipt – so you can link your existing customers to your referral code just by scanning it with their mobile phones.
Consider Qashier’s multiple digital solutions in an all-in-one device that can improve your business.
The smart POS system can handle different operational aspects, from QR code table ordering to table management (F&B), employee management, customer relationship management (loyalty programs), inventory management, data analytics, and cashless payments.