The document outlines 5 key steps for a successful referral program: 1. Devote adequate resources upfront to properly set up the program from the start rather than taking a gradual approach. 2. Understand how current leads enter the sales funnel and integrate the referral program accordingly without disrupting workflows. 3. Make the call-to-action for referrals very clear - tell customers what to do, how to do it, and what they will receive for participating. 4. Promote the referral program extensively and continuously across all customer touchpoints to encourage ongoing participation. 5. Ensure the program complies with FTC guidelines on endorsements and IRS tax laws regarding rewards over $599 by

1. TOP 5
must-dos for a
Successful
referral program

2. 1.Devote the time, money and
resources needed to set the program
up right the first time.

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. Approaching a referral program with
“one toe in the water ”
will net potentially inconclusive and often
mediocre results.

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. 2.Understand IN PRACTICE how
leads are currently making it into
the sales funnel.

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. 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. 3.Make the call-to-action for
customers crystal clear.

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. 4.Promote the referral program
everywhere customers go, and
promote it constantly.

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. 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. Without frequent and continued
promotion, referral program success is
left completely to
chance

15. 5.Follow FTC compliance
and IRS tax laws.

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. 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. 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. 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. 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. 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.