How Service Companies Can Use Incentives To Delight Referrals

This article about delighting referrals for service companies is by Megan Mosley, a marketing specialist at Referral Rock. 

Referrals are a gainful source of potential leads for service companies.

Megan Mosley

There is a ton of evidence out there that prove their power. A study by Deloitte found that people among all age groups trusted recommendations from advocates and friends most.

To go along with that, Nielsen found that 84% of people trust recommendations from people they know.

This is key for service-based businesses, because of a lot of clients choose a specific company based on the recommendations of others. And for a service business, word of mouth travel might be the only way someone hears about their business.

The caveat? Well, despite having a good experience and being happy with your product, referrals don’t always happen if unprompted. The secret is, you have to ask. But how do you ask in a way that doesn’t seem self-serving?

By incentivizing people to refer. By providing a small incentive you can harness the trust and power of your existing customers to bring in new ones.

Let’s cover five ways to use incentives to delight your customers and leads.

1. Give Them Something They Want

If you have a rewards or referral program running, an incentive set, but still haven’t gotten any referrals, take a look at what you’re offering. You need to consider the incentive you’re offering, as well as who is receiving the incentive.

Here are some factors to consider:

  • Your type of service… If you are a one and done type of service, like moving — discount and coupon codes won’t work. For repeat services, they can work wonders.
  • The sales process is complex. You may need to incentivize them at different stages to keep them interested. (Earn up to $50 off your next service… $5 when a referral schedules a consultation, $10 when they are officially booked, and $35 once they pay!)
  • If you’re a subscription service… an account credit will be a great option to choose.

Of course, there are plenty of other things to consider. For example, if you’re only offering your existing customer an incentive, the new referral might not be as interested. With a service business, most people want to get a good deal. So if you offer a good deal or discount to the new customer as well, they might be more inclined to schedule an appointment.

The same is true for your customer. Sure they will probably keep using your service, but that doesn’t mean they are willing to use word of mouth to refer you either. If you give them additional reasons (outside of providing excellent care), you might be giving them exactly what they want and they will continue to refer new business to you.

If you’re unsure what will work, you can always ask. You can attach a survey to an email or add it to your invoices. You can also ask them during their service.

field service technician, smart home

2. Make the Incentive Achievable

An incentive can only delight a customer if it is achievable. Consider the process you have come up with in order to earn a reward. Does it seem overly complex? If so, you might scare away potential referrals.

Think of it like this. You might offer a $500 incentive for referring. A customer may think that’s a great deal. But, if they read about your referral marketing program or the steps to referring and they seem impossible, invasive, or too time-consuming, they won’t bother. Even if the reward is great.

The important thing to remember is they don’t have to refer business to you. They are choosing to do this for you, more like a favor.

So if you are using an incentive to drive referrals, no matter how good it is, if it isn’t achievable it won’t work.

3. New Incentives Each Time

Someone has given you a referral. That’s great. But, will they refer again? Something you can try is changing up the offer.

For example, if you’re a lawn care service, you may offer a free weed treatment for each referral in the summer. But, that incentive isn’t going to work all year. Come fall and winter you may have to offer something different to keep referrals going.

You could additionally start by offering free treatment for the first referral. Then on their second referral, you can offer a $20 coupon, and so on. You can make each referral worth a different reward.

4. Have the Incentive Grow

Expanding on the last point — you can give a dollar value for each referral and the more you refer the more you can earn. Let’s say you offer $5 for the first referral. That might get people excited (depending on the price point of your service). But, if they found out they could earn even more for referring a friend, they likely would.

Looking at this model, you can have the incentive grow by $5 for each referral. You may want to set a limit for this one — the choice is yours. If the customer decides to keep referring you people they could, in this case, earn $25 for referring their fifth person. Think of it like using stages or tiers.

5. Give them an Exclusive Experience

There are hundreds of ways to do service business marketing these days. Technology and automation really can help operate many areas of your business. So making something feel exclusive can make the whole referral process seem unique and personal.

We’ve talked about a few different reward options. But we haven’t talked about making incentives an ‘exclusive’ offer.

Perhaps you create a referral program and invite all your customers to join. But what if you have super customers or ones that you can consistently rely on or have a good repertoire with? You can create an exclusive club for them — perhaps one that you only refer to internally. When they refer, you can reach out personally to thank them, and give them something a little extra.

Let’s say you’re a moving service, you might run a referral program where you offer a gift card for referring. But, if you have a particularly good relationship with someone, you may want to offer something a little extra. Or even make them an ambassador for your brand. Especially if the referrer has a complementary service, like a Realtor or Mortgage Broker.

If you like, you can offer them an affiliate link to place on their site. If traffic comes from that site and it turns into a sale, you can offer them a set finder’s fee for helping your business even more.  

Obviously, you wouldn’t offer this to everyone, therefore it’s an exclusive invite! And if you choose wisely, you can create a steady flow of new business.

In Conclusion

There are plenty of ways to delight your referrals. You may need to think out of the box just a little to come up with something that fits your business and your customers’ wants. But, if you consider the factors above, you’ll likely find a combination that works perfectly for you.

Megan Mosley is the marketing specialist at Referral Rock, where they believe every business has the potential to increase their word of mouth. When she’s not working, she enjoys sipping on coffee and hanging out with her family.

Want to learn about how service business management software can help you manage and grow your business? Book a free, private demo of Vonigo.