How To Start A Referral Program

One of the easiest ways to attract new customers is by asking your existing clients to spread the word about your business. People trust the opinion of their friends and family, so when your clinic is recommended to them, they are more likely to book an appointment with you.


Think about the growth potential of a really great referral program for a moment: If each of your existing clients has just one of their friends/family/colleagues book an appointment with you, your business has doubled! Leveraging that network is very powerful, and the great thing is, referrals require no upfront investment.


So let’s talk about the structure of a great referral program, keeping in mind there are two people involved in the referral: (1) your existing client and (2) the potential new client.


Tip 1: Give your existing client an incentive to refer a friend.
Research has indicated that when compared to offering no incentive, offering an incentive increases the likelihood of a referral. This is especially true when someone is considering referring an acquaintance rather than a really close friend (for example: a work colleague).


Since you want to get as many referrals as possible, you want to make sure people have an incentive to refer their co-workers, sports teams, old high school friends, etc. – not just their close friends.


A common incentive that several clinics have had success with is offering a gift certificate in exchange for a referral. The reward is only given to your existing client when they refer a new client and when that new client books an appointment with you. The recommended gift certificate value is $15 - $25. Anything less may be viewed as insignificant, and anything more may be giving away too much.


Tip 2: Give the potential new client an incentive to book with you.
Offering an incentive to both your existing client and the potential new client is called a two-sided incentive. Several businesses in multiple industries have used this model very successfully.


There are two reasons to offer a two-sided incentive. First, it gives the person making the referral feel special – “You can get a deal if you book through me” is a nice VIP feeling. Second, it gives the potential new client extra motivation to book with you. Just like the example above, people are more likely to act on the referral if an incentive is included.


What makes a great two-sided incentive is when both incentives are the same. It keeps the message very simple, for example: “For every friend that you refer, you get a $20 gift certificate, and they get a $20 gift certificate”.


How To Start Your Referral Program
Starting a referral program is a breeze. Begin by designing a simple referral card. This can be the size of a business card or gift certificate. On the front of the card you will highlight your offer, for example, $20 off your first massage at ABC Massage.


On the back of the card, explain how the new client can book an appointment with you, include your location and contact information, and finally a blank space where the existing client can write their name. Having a spot for the existing client’s name allows you to track who is making referrals and earning rewards.


Lastly, include an area to write in an end date for the offer. Set the end date to be 2 to 4 weeks from when you give out the referral card. The reason for an offer end date is to create urgency. If people know the offer is good forever, then they often wait forever to redeem it. Your goal is to get them to redeem it as soon as possible.


After printing 250-500 copies of this card on a quality paper or card stock, you are going to distribute the cards to all of your existing clients. Once you have completed a session with a client and they are paying, let them know about your referral program. The benefit of telling them about it when they are paying is because their mind is now focused on money, so presenting them with an opportunity to save money is likely to be well received.


You can say something along the lines of:


“Mary, I was wondering if you can think of 1 or 2 people that would also benefit from massage. What I’d like to do is give you some of my referral cards. This will allow your family or friends to get $20 off of their first massage, and as an added bonus, if they decide to come in for a massage based on your recommendation, you’ll get $20 off your next massage too.”


The goal of the short script is to phrase the referral as a win-win-win scenario – which it truly is. They get a great deal, they get to pass that deal along to a friend or family member, and it helps grow your business.


When a referral is redeemed by a new client, continue the cycle. Now that they have experienced the value of receiving a referral, they are likely to recommend you to a friend. Try a simple script like this:


“Judy, I’m so happy that you were able to redeem the $20 referral promotion that you received from Mary. Now that you’ve had a treatment yourself, I’d like to give you some referral cards as well. You can pass on the same offer you just redeemed to a friend or family member that you think would also benefit from massage. And as a bonus, if they decide to redeem the offer, you’ll get $20 off your next massage too.”


As you get more and more new clients booking through your referral program and you continue the cycle of pitching the program to each new client, the effects will really start to snowball and it will have a tremendous impact on your business. Just remember, the success of your referral program relies on you telling each client about your offer and asking them to make the referral.


Be sure to check with your local regulations on providing monetary incentives to clients.