Help me out here, Steve. I want to show my gratitude to my customers who refer me. But money seems a bit tacky plus I don’t have any to spare right now! So how should I reward my Cheerleaders?
Indecisive in Rochester
Good question, Indecisive, and a hotly debated one at every SFS seminar! Remember, we don’t say we have ALL the answers, just most of them! So let me me throw out my two cents …
My feeling always was (and still is) that the almost sacred relationship I had with a Cheerleader was so special and pure that I never wanted to risk it with even a whiff of a “kickback”. Every single customer who referred a customer (it’s a whole science finding out who referred who) received a hand written note from our General Manager or myself.
I personally feel (and twenty years of my own experience and hundreds of our SFS members bear this out) that this sincere expression of gratitude is worth much more than whatever cheesy financial compensation we could offer. However, I cheerfully admit there are some much more successful than I who do the opposite. And that is great. Works for them. Whatever floats your boat. (Whatever you do, do SOMETHING to recognize the personal investment that your Cheerleader has made in your financial future.)
Steve
Seriously, though, I would appreciate hearing how others deal with Referral Rewards. I used to be dead set against “kickbacks to the customer” but some very successful SFS members report they are doing great with them. So lets hear it, folks!
If you are going to give any type of monetary reward you have to be sure you can afford it by charging enough to allow for that. That is something you needto include in your budget.
I absolutely agree, Bobby. And you see my feeling that the very best “reward” is a personal note hand written by the owner of the company. However, many SFS members who I respect greatly do include financial incentives and tell me they work great. And yes, they do charge enough to factor this expense in. when you think about it referral rewards are just a marketing cost and probably a very expensive one.
Thanks for chiming in,
Steve
PS The single best thing to improve their business for 96% of the carpet cleaners out there? Charge more- starting today. The vast majority of you folks do not remotely charge enough to cover the true costs of doing business, much less make a true profit- which will allow you (if you desire) to hand out “Referral Reward” like popcorn on Movie Night!
My wealthier customers would be insults if I gave them a referral reward. Some cleaners give 10% back to the referrer but they know about it ahead of time so they expect it. Many of my clients have kids or pets. I have a dog character for my company so I got kids size shirts printed with a cool design with my contact info really small. I also had a bunch of magnetic chip clips printed. Depending on the customer, I’ll give tshirts to their kids ($4 each) and a couple chip clips, maybe I’ll send them a gift certificate to a local pet supply store when I mail them our survey, depending on the cost of the job, etc.
If the kids and dogs are happy the clients are happy an when they’re happy they’ll give you referrals. It keeps things casual, they remember you, and it doesn’t cost as much as much as a cheesy cash referral.
“Cheesy cash referral!” I love it! And yes, I have to admit I felt this way too. BUT many of our best members tell me they have great success with cash! Let’s hope some of them chime in and tell us how.
Steve
PS I like the charity angle. Much of it depends on your market demographics. Even though I will say today’s “value customer” won’t have her feelings hurt with a “referral rebate”. Hmmmm, I like the sound of that phrase!
Cash can be KING !! I like to give cash or a 10% discount toward the next cleaning. I send a Thank You Card with a hand written message and include 5 Two Dollar Bills. The bills being somewhat uncommon are accepted very well. As for the higher end clients paying $600 or more for their regular cleaning, I send a Thank You Card with a personal message and the total amount of savings on their next cleaning (10% – based on their initial invoice).
Interesting. I am intrigued by the 5 two dollar bills. Sort of a tongue-in-cheek joke.
Steve
PS But my guess is the hand written thank you note means more to the customer than any amount of money, even if it is denominated in two dollar bills!
I send a handwritten thank you card with a $5 Starbucks gift card enclosed. That way the customer thinks of me again when they get their mochas. Plus I give them 10% off their next cleaning. I want them to do all this again and again. My customer base is like a golden goose – don’t do much other marketing besides having a website now.
Most of our clients live out here in the boonies and commute to town for their jobs. So I send a gas gift card along with a thank you note. Seems to work ok for us.
Hey stever. good call. you always do take the high road.
as a rule, I’m not opposed to giving someone the “Chicago Handshake” (I coined that word. watch how it spreads.) people who have been good to me, I like to thank with cash. mechanic’s delivery men. tech’s.
I made a connection with a plumber to refer me to his flooded basement people.
he said the last guy was getting all weird about kickbacks and stuff. he’d just rather have a good cleaner he can refer and let it go at that. I also am working with designers who rack up 10’s of thousands of dollars in fees. am I really gonna slip em $20.00 over coffee?
best,
your pal, frankie chocolate.
Ps. visit my website, the carpet cleaners crocodile a site full of stories about carpet cleaners.
I offer a 10% gift check good for services if used within a year or you can exchange it for cash within 4 months of issue. This has worked wonders for me and my referrals this year are THROUGH THE ROOF! Thank goodness!
There have been some weeks where 90% of my work for the week has been referred to me. I did not have that type of trackable success with any other ‘programs’.
Kris
Hey Kris and really everyone else that has posted here,
All good ideas above as evidenced by the fact that they are working for you! However, I would only interject the fact that NONE of this stuff will work right if you don’t offer Value Added Service along with your Referral Rewards program.
Steve
PS So who is next to share what they do?
We started out “Referral Rewards” program last January. We too have seen a great response. BUT, I want to challenge Steve’s idea that it is an expensive marketing cost – we’ve found quite the contrary.
We offer 10% of the total job for any new client sent to us to the person who referred them. They can use the reward in the form of credit for their next cleaning, cash, or if there is a conflict of interest in accepting a “reward” then we will donate it to the chairty of their choice in their name, or allow them to pass the credit on to someone else to use. We do have an expiration date of 1 year from the time they receive their card/referral certificate.
For cash, they must tear off the certificate and mail it back to us. For credit, they present the certificate at the time of cleaning. (Of course we keep records and if someone did mis-place their certificate and wanted to use the credit, we would honor it)
We introduce/explain the program by educating our customers that we’d rather pay them to advertise for us over the newspaper, or direct mail/Val Pack since they have first hand knowledge of our work and have more credibility to future customers then a piece of paper or ad they read. Everyone gets that and loves the idea.
Many of our customers tell us they would refer regardless, but we still send them their reward certificate in the mail.
Here’s where it becomes a small investment – since they have to use with in a year or mail back, it gets put aside after they receive and doesn’t get used or mailed back.
YTD we have 58 referrals. Only 25 (approx 50%) have redeemed them for cash or cleaning credit. Of the over $30k in business we have made from these referrals, we have only paid or credited $820 of a potential $3000. So, it really isn’t costing us 10% but even if it did….$3,000 for $30,000 in business – we think the ROI is worth it. And how many of those custmoers will continue to use us? We only had to pay 10% for the first time they used us.
We are hoping to be able to drop our signficantly more expensive direct mail piece and rely solely on the referral program. That will save us upwards of $15k a year.
Clearly this method of marketing is way more cost effective for us and costs signficantly less.
Meg
No “challenge” needed, Meg! This is not “my site”. It is developed for all of you and hopefully will be a resource that is maintained and updated by all of our SFS site members. (A reminder for everyone is that to post your thoughts on here you don’t need to have attended a SFS seminar.)
I would especially commend meg for her tracking and financial analysis. This “hard numbers” approach to marketing is an often overlooked factor. As I tell every SFS class, “Build your business around the emotions of your customers but never make business decisions emotionally!”
Thanks again, Meg, for contributing.
Steve
PS Note again Meg’s key point above on how they explain their “Referral Program” to their customers:
“We introduce/explain the program by educating our customers that we’d rather pay them to advertise for us over the newspaper, or direct mail/Val Pack since they have first hand knowledge of our work and have more credibility to future customers then a piece of paper or ad they read. Everyone gets that and loves the idea.’
I LOVE IT TOO!
HI Steve,
I was like many other companies who offer Cash or Cleaning Credit. Since I use Camelot it is a breeze to keep track off.
Over the last two to three years I have found with the tightening economy that my clients are participating more than before.
Maybe it is because I send them CASH in a hand written Thank You card for the referral.
I renamed my Program and have set a scale for the Commission.
I now offer Referral Commissions. I have set a scale to this so that they receive $10 for the first 5 paying referrals. This is followed by $15 (6-10 referrals); $20 (11-20 referrals) and #25 for any referral from that point on.
My job average is just a few pennies shy of $300. So if I was to find that very enthusiastic Cheerleader and they were to send me 25 referrals in one year they would receive a total of $350 in Cash
With my new pricing packages and improved delivery presentation I have started to see about 50% of my jobs increase their average by $100. (yep middle package includes protector with a 6-month Spot & Spill Warranty).
The reason I went with set dollar amounts for the commissions was to keep it simple.
I have found that the clients get excited to reach the next level of commission and I have no administrative concernes after I send off the Thank you card with cash.
They get cash to spend as they choose and I get lots of referrals.
It is a WIN WIN for both parties. 🙂
Best part of it all there is no internal hiccups or chaos.
Sincerely,
K.I.S.S. (Keep It Simple Silly)
Works for me. However, my guess is the key to your impressive success is the “improved delivery presentation” or in SFS language, “Value Added Service”. If you don’t “blow people away” then they just won’t refer you no matter how much the “bribe” is! 🙂
Steve
PS However, a “gift” as detailed above to thank them for a referral is always appreciated!
I like the idea of considering your demographics and offering them something they can actually use. I think they will appreciate the gesture much more than just handing out cash.