Start a Referral Program for Your Service Business

The concerns of starting a referral program

Poorly designed referral programs can mean you’re giving away too much business. We’re here to make sure you get off on the right foot.

To understand and see the benefit of this marketing tactic, you need to monitor the results. Track how many referrals are made for your business.

In some cases, the incentive might seem like you’re throwing away a lot of money and time. But remember, these customers trust your service, and will call you when your services are needed. If they become repeat customers in the long run the payoff is obvious.

For services that need recurring work, it’s easier to see the benefit of a referral program. The incentive is a one-off cost for only one of those jobs.

Why referral programs work for service businesses

Having a referral program is common and recommended across all types of businesses. Your customers trust word-of-mouth more than anything else. Recommendations from your clients can be used as your best bet for getting new clients.

Looking at the Nielsen Global Trust in Advertising Survey, we see that 92% of people trust recommendations from friends.

People inherently want to share their positive experiences. These conversations trump any recommendations you’ve seen before. For example, a homeowner is looking for a cleaner and does research on their own. They come up with prospective cleaners to buy from. Later that day, a friend recommends a cleaner they are working with. The homeowner uses their friend’s recommendation.  This is because they trust their friend more so than anything else.

A structured referral program will help examples like the above to happen more often. Why wouldn’t you use your happy customers to get new business?

What is a referral program?

With any referral program, you need to understand the basics:

  1. You provide a service for a customer and deliver a great experience.
  2. The customer recommends the service to others and is defined as the referrer.
  3. The person that receives the recommendation is defined as the referee and decides to hire you.
  4. When the referee uses your service, both the referrer and the referee receive an incentive.

Communicating your referral program to customers

You need to communicate your referral program and show the incentives behind it.

First of all, make sure you’re communicating this to your ‘A’ customers. The people that love your service and are loyal to your company. Strategically use the referral program with customers that have a positive experience with you. That way, there is an increased chance that they will make a referral.

You don’t want this message to get lost or disregarded when you step out that door. Help your customer identify the type of people they ought to share your service with. They might not know the diversity of your service offerings. For example, you do plumbing for a homeowner, but they are unaware that you also offer HVAC services. Be clear in the message, and make the experience as easy as possible.

Secondly, look at your business operations and decide what incentive you want to offer. Make sure it makes sense for your finances and allows for both the referrer and the referee to benefit. This will allow your referral program to organically grow when both parties benefit. Here are some examples of incentives you could offer:

  • Referer: $100 off your next service with us. Referee: $100 off your first service with us.
  • Referer: $50 gift card to a coffee shop. Referee: $50 off your first service with us.
  • Referer: Value-add to next service with us. Referee: Value-add to the first service with us.

Take a look at your offering and do what makes sense for you. It doesn’t have to be money! For example, a value add to your regular offering can work: extra window cleaning for residential cleaners, tree trimming for arborists, or added fertilization for lawn care. The key takeaway is to ensure the incentive is for both the referrer and the referee as this will allow your program to scale faster.

Once you’ve settled on an offering, you can send your ‘A’ list customers an email summarizing your referral program, making sure it’s easy to understand the benefits so that they’ll be more likely to take part. You can also leave behind a flyer after a job well done.

There are lots of ways to make the referral program simple to implement for your customers. You can simply ask your customer if they’ve been referred. This will ensure your customers receive the incentive. In addition, you can use email, getting the referer to cc your company email in the recommendation. The one thing you DON’T want, is your customer having to put in a lot of effort to refer your service to others.

Get started on your referral program today

The earlier the better. Experiment with different offerings, and see what works for your business. Just because a monetary incentive didn’t work doesn’t mean a value added service won’t. The risk to trying is minimal, and the reward could be substantial.

Imagine what your field service business can become with happy customers making constant referrals to the right people, at the right time, with the right message!

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