Customer Appreciation Programs

Many savvy home improvement businesses are choosing referral marketing programs to tap into the hidden vault of customers lying dormant.  Historically, referral marketing is one of the least expensive – yet most effective – methods of promoting any business. 

Lead generation can be one of the most time-intensive elements of a business’ marketing program.  But once a prospect acts on the referral of a friend, colleague or family member, converting them into a paying client becomes much easier.  And the cost to implement a comprehensive referral marketing program is minimal. 

So what are the components of a good referral marketing program?  One is based on a business rewarding its clients for referring people to it.  There are some issues to be considered.  First, a business must determine the lifetime value of a customer.  This can be computed by a simple equation: 

(Income received from a business’s client) x (transactions per year) x (no. of years they remain a client). 

The sum of this equation represents the amount that the business can spend to attract and retain a new client and still remain profitable.  If the business can attract and retain new clients for less than the sum, the business’ profitability can increase significantly.

So how does a business go about implementing a good referral marketing program?  After completing the exercise above, a business must communicate to its existing clients that it would appreciate it if they would refer the company to friends, family members, colleagues, neighbors…anyone who might benefit from its services.  To accomplish this, many businesses include this on all their marketing materials such as brochures, receipts, invoices, etc.  This process is made easier by the inclusion of a referral marketing card that clearly identifies the client’s name so they can be rewarded properly, while offering a special discount to the referral.

This creates a win-win situation because the current client can be generous by sharing a discount, while also enjoying a reward of their own.  The key, though, is that the business must offer a referral marketing prospect with a service that has a high perceived value but a low cost.

The next step is to define a comprehensive system for rewarding clients for their referrals.  The value of the reward should be commensurate with the number of referrals any one client provides, so that information must be recorded.

It’s obvious that a good referral marketing program can increase a business’s profitability for a small investment.  Most businesses wisely choose to employ the services of a referral marketing professional to design and execute the program for them, thereby freeing up their time to make sure that they are satisfying the needs of their existing customers.

If you are interested in learning more or even beginning a program of your own – give us a call today on 949-478-3951 and we will get you started.