Building a Referral Program

A referral from a trusted source is a huge advantage to any sales professional.  Many times the person referring is already doing a majority of the leg work and educating the prospect on their experience.  

These types of leads are extremely valuable and you may already have contacts that would be willing to help.  Some basic ideas that could be used to gain referrals:  

• $200 cash for auctions referred that grossed over $10,000 in bid prices.  
• Offer a commission reduction on a future auction if they refer another company who sells over $XXXXX amount with you.
• Negotiated % of the contract amount.  

After all, who doesn't like to make money for minimal work?  Referral programs have been around forever and can help build your brand and loyalty among current clients by rewarding them for praising your services.  

Here are a few tips for setting up your own referral program:  

• Follow through - Nothing is worse than not following through on your word.  Ensure that you have the systems and ability to track these referrals and don't let them fall through the cracks.  It can be as simple as a spreadsheet or even the old standby, pen and paper. The last thing you want to do is lose a loyal customer while trying to gain a new one. 
• Make it worth it -  It’s hard to get excited about $20, but $200 or more is certainly worth your attention.   The referral reward does not have to be monetary either, you could cross-refer people to their business or offer a discounted commission on a future auction. 
• Set the boundaries -  A $300 auction can hardly be worth a referral fee.  Make sure that you current clients know exactly what the parameters are and how they can cash in on your referral program. 
• Don't push -   Make sure that your current client is comfortable with the program without pushing it on them.  You want them to be an advocate for your company, which can only be achieved naturally through great customer service. 
• Don't get anyone in hot water -  Know the situation.  Some municipality and government employees are unable to receive "gifts" from outside vendors.         

There are tons of blogs and resources out there that can help set up a referral program.  Here a link that I found to be helpful: 

http://www.createandthrive.com/5-tips-on-setting-up-a-referral-program-for-your-business

So…how much untapped potential is already on your contact list?  It might be time to find out.