Creating a Referral Marketing System

Creating a Referral Marketing System

Author: TG Contributor
Date: 2020-01-29

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System (s s t m) n.: An organized and coordinated method; a procedure.

A. There are many reasons referral systems are important. These systems primarily help your mindset, and your mindset is the first step in creating a solid positive change.

Referral system implementation delivers the following benefits:

· Proactive referrals recruitment

· Customer assistance, relationship and loyalty development

· Sequential increase of referrals year-over-year

· Referral tracking and data-base development for future campaigns

· Lower cost per customer (CPC)

· Saves employee time and company wages

· Maximum return on investment

· Improves message penetration

Referrals are valuable but many businesses and marketers still think of them as happenstance and not as a serious marketing medium. This is a myth, and we need to be enlightened to the fact that, much like having a gym or personal trainer helps you lose weight, the proper referral system makes referral marketing a priority and after a while, it becomes second nature. We learn to take the necessary steps with every new customer, to ensure that they will tell others about our products and services.

The definition of a referral system is a repeatable procedure that you put into place and build on year after year. It's a process you form with people and businesses that will have a positive influence on your company and it will bring you profit and growth opportunities.

B. To start a referral system, begin with a commitment to learn what referral strategies work best within your industry.

Cherry Creek Investment Advisors Inc. originated with a referral plan. The founders started out several years ago as an investment advisory firm that provides personalized and performance-oriented financial services for its client base. It has grown from zero to $80 million in assets, all through growth originating from a referral system.

Implementing a quality referral program not only develops your referral business and increases sales, but also saves you money on marketing and advertising. Statistics show that referrals can offset advertising as much as 20, 50 even 100 percent annually, consistently. And if a business is 100 percent referral-based, it's ad spend is practically nil.

C. The core objective that every business referral system must have is ease of use and seamless integration into existing sales and marketing structure.

And when you build your referral system in a way that lets people feel good about referring you, you will tap into the master human motivation. People want to pass on a smart buy, a new find, a great experience - in part because it makes them look and feel smart, or whatever that thing is that makes them look good. Any successful referral marketing effort you engage in should give your referral source this kind of motivation.

With a successful referral system, you can bet your business needs some amount of the following:

Buzz - People will refer things that are new enough to be a find but solid enough to be known by "those in the know".

Met Expectation - People want to be sure that their expectations will be met - and the expectations of those they refer to you.

Value - Your referral system should be set up to reward your referral base and acknowledge each referral as it comes in. People won't continue sending referrals if you don't acknowledge their effort.

D. Remember, referrals bring money into your business without the hard sale, and when a business sets up its system to reward customers for referrals, rewards are reciprocated as those customers become an extension of the sales force.

Referral marketing significantly challenges traditional marketing methods when a business implements the right online and offline tools. The rewards and benefits are undeniable. Investigate all available resources to determine what type of referral marketing system works best for your business and industry. No matter what system you choose, it really comes down to assisting people in being able to share "what is so great" with others.

About the author

Diana D'Itri is the Exec VP of Ravebiz, a leading referral marketing and technology company. She's a key driving force behind educating clients on how to generate more quality referred customers through practical applications and an automated, web based system called the Rave APG eReferral For a free download "31 tips for boosting referral business" go to Diana can be reached at (866) 284-3020 or email her at

Author: Diana D'Itri

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