Building Your Clientbase with Referral Cards

Everyone knows that WORD of MOUTH is the best form of advertising. A genuinely satisfied client will tell their friends. BUT, have you ever been told about a specific business only to forget it's name. You still remember that a friend had a recommendation, just not specifically what it was. That is often the case with word of mouth. It holds weight because it is from a trusted friend, but it lacks staying power because it is usually verbal. While the samples and examples provided are specific to the salon/spa industry, the basic principles can be used in many business types and models. In today's economy this is a crucial way to grow your business and your businesses profits.

Referral Cards are WRITTEN word of mouth. It give the potential new client a tangible reminder of the exact business that was recommended. Now, even weeks or months later they will be able to remember YOUR business. Your business goes with them after the initial recommendation.

The other key factor that a referral card program offers is the INCENTIVE. It offers an incentive for the new client to come into your business AND an incentive for your existing client to "tell a friend". For most businesses a $20 discount offers the most bang for your buck. It is a high enough dollar amount to increase the rate of return and yet not so high as to lose money. I have had clients go as high as a 50% discount, but that is a decision that you need to determine based on your individual business. Most of the programs I set up and cards I design, utilize the $20 value.

HOW does it work?

The best referral card systems are easy and cost effective. They rely on business card sized cards that are printed on both sides for optimal return. (see samples below)

Side One : The name of your business (preferably your Custom Logo) and the OFFFER. The offer should read something like this "Save $20 OFF Your First Visit". The "$20" should be bold and stand out. On the bottom of the card it should say "see back of card for details"

Side Two : This side should also include name and offer (offer somewhat smaller), address, phone number, one line that states stylist with a blank line, one line with Referred by and a blank line and at the bottom of card "cannot be combined with any other offer. Under the offer it should state "bring this card in to receive discount"

HOW do I use them?

Before your existing client leaves uses this script (tried and true) "I'm going to show you how you can save 20% off your next visit. Hand these out to friends, family, co-workers. When ever I get a new client from these cards you will get $20 off your next visit. Be sure to put your name on the Referred by line, so I make sure you get credit" You will notice that you have explained the program to your client from the "what's in it for him/her" perspective, as this generates the most interest.

Be sure to put your name in the Stylist line to ensure that the new clients that are being referred are going to ask for you. Hand 5 to EVERY client (also tried and true). Do NOT pre-judge who you think will or will not hand them out. You will always be surprised at the outcome. Also, keep some cards with you at all times so you can hand them out in line at the grocery store, when you get your morning coffee or to add one to your tip when you go out for lunch or dinner. They can also be added to gift baskets or other promotional pieces that are given out at community events. Every opportunity should be utilized to grow your business.

HOW does giving $20 OFF make me more money?

Example without Referral Cards : Sue comes in every 4 weeks and spends $40 per visit on services. This equates to approximately 13 visits per year. This means $520 in services per year from Sue.

Example WITH Referral Cards : Sue sends in Jill who saves $20 OFF her FIRST visit and then Sue receives $20 OFF her NEXT visit. Sue then spends $500 for the year ($20 less than without the program) and Jill (assuming the same 4 week cycle and $40 per visit) spends $500 for the year (all new money). This put the year for the two clients at $1000 versus the $520 for only the one client. Now multiply this by every new client gained from this easy to use program. This does not even factor in the increased sales in retail to your new clients.

The key factors to remember are to hand 5 to every customer every time. It is a numbers game. Remember to use the script above to clearly convey how the program works and "what's in it for them". Keep enough cards filled out with your name at all times.

When having your referral cards designed remember to include your logo and make it a two-sided FULL COLOR card. This will ensure that your card is seen and remembered. I have always designed these cards with as much "WOW" factor as possible, while making sure they are easy to read and understand. Utilizing a local graphic designer to help with the design and printing can help insure a good, clean eye-catching design. This can also help avoid the "generic" look offered by many online printing companies. You can still use an online printer for cost factors, but the original and unique design is worth a few extra dollars. Branding your business is important and will be discussed in a future article.

Happy Business Building!