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Top 5 Referral Must-Dos

Thinking of launching a referral program to generate more revenue? Learn the 5 Must-Dos!

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Top 5 Referral Must-Dos

  1. 1. TOP 5 must-dos for a Successful referral program
  2. 2. 1.Devote the time, money and resources needed to set the program up right the first time.
  3. 3. Companies sometimes think launching their referral programs as pilot studies and then growing them into more robust programs later is the way to go.
  4. 4. Approaching a referral program with “one toe in the water ” will net potentially inconclusive and often mediocre results.
  5. 5. If the referral program is going to be an integral part of the enterprise, then find a way to incorporate all the parts of the enterprise necessary to ensure program adoption and success right from the start.
  6. 6. 2.Understand IN PRACTICE how leads are currently making it into the sales funnel.
  7. 7. Before considering a referral program, companies need to truly understand how their sales team interactswith the tools they are provided when it comes to current customers and potential leads.
  8. 8. There are ways to successfully integrate referral programs into CRM systems that can streamline the work being done and increase ROI without introducing a change in the organizational culture or sales process.
  9. 9. 3.Make the call-to-action for customers crystal clear.
  10. 10. simple The message is 1.  Tell your customers what you want them to do. 2.  Tell them how to do it. 3.  Tell them what they will get for doing it.
  11. 11. 4.Promote the referral program everywhere customers go, and promote it constantly.
  12. 12. Research on referral program success rates shows that broad promotion of a company’s referral program is a significant step in getting customers to refer multiple times. 
  13. 13. If a current customer gets a referral program invitation email from a company but has no referral in mind, the email will be ignored. However, weeks later, the same customer may identify a referral and will need to be able to easily find a link to the company’s referral program.
  14. 14. Without frequent and continued promotion, referral program success is left completely to chance
  15. 15. 5.Follow FTC compliance and IRS tax laws.
  16. 16. The Federal Trade Commission recently passed a law under its 16 CFR Part 255, “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”   
  17. 17. The regulation states if a person makes a post on any social network (such as Facebook, Twitter, Instagram, Pinterest, or LinkedIn) and stands to gain a profit from the endorsement or testimonial, he or she must at a minimum include a statement such as, “This is a paid endorsement,” or “#paidad.” 
  18. 18. Your referral program Terms and Conditions should include this language so you can be certain your program is compliant with the most current statutes and you are protected against legal action. Terms & Conditions
  19. 19. Second, depending on the amount of the referral reward and the rigor it takes to achieve it, companies need to consider how much money any one customer could potentially earn in a calendar year. The reason for this is simply the IRS.
  20. 20. If a customer receives over $599.00 per year in rewards, to be compliant with US tax laws the company who paid those rewards must collect a W-9 from that person and submit a 1099 to the IRS on the customer’s behalf.  
  21. 21. There are referral program vendors that will track 1099 information and disseminate the paperwork as needed to be certain you stay compliant with US tax laws. Be sure to ask if these are features of their platform when talking with a potential referral program vendor.