Questions for Dealers About Referrals

[Chris_H]

All,
Do any of you have a referral program?  I would like to know the specifics of your program.  Please PM message me if you do not wish to post this on the forum.
Thanks,
Chris

[stuart]

I think a referral program is essential, we actually have several levels of referral including one for customers, one for builders, one for employees.

The customer referral is an in-store credit, the one for builders is a direct payment and the one for employees is based on a bonus. All of it is budgeted in advertising and we are working on new numbers for 2005 right now. I think it is important to not let it get stagnant and keep it fun by changing the offer occasionally.

[HotTubMan]

We send out 4*$25 store credit vouchers for a consumer tub refferal.

Discount for contractors. This discount would vary based on how much work we do or they do.

PM me if you are looking for more specifics.

[tony]

I am not a dealer, but I can tell you what my dealer does.  $100 store credit for both the purchaser and the person who referred them.

[mhraracing]

The Caldera/HS dealer we bought our spa from has a $100 in store customer referal bonus. My wife's boss is getting the $100 dollar gift certificate.

The wife  better get a good Holiday gift this year from her boss -  

[Vinny]

My dealer gives a certificate for either a $150 store credit or 10% off on the next service call (after warranty) for referrals. According to her, she will give you as many certificates as referred people buy from her.

[newtotubbing]

My dealer give you a $100 store credit. Like that goes far in a hot tub store!



Jonathan

[windsurfdog]

I referred a friend who bought a spa from my dealer.  I turned the store credit into a full set of filters and some dichlor so the store credit went a long way for me.....and I'll do it again when the opportunity rises.

[Steve]

Sometimes people are just so darn happy with the product and service they receive, they refer others while expecting nothing. I LOVE those people as they are the ones that are truly grateful when they receive a gift for the referral.

Remember that dealers have no obligation to give a referral fee or gift but it's just good business. A business that's been around for many years can do upwards of 50% of their business on referrals so it is important to recognize this.

I believe $100 - 150.00 is very good. Stuart brought up some very good ideas with changing it up periodically as well as recognizing the different levels that should be rewarded including employees.

I few years ago Beachcomber did a fantastic promotion for referrals where they were giving away a free Roots leather bomber jacket with any referral. This jacket retailed at almost $500 and we literally had customers looking for other people that might be interested in a new hot tub! They were part-time employees that we didn't have to have on payroll!  

My only suggestion is to have specific criteria. You don't want customers coming in 3 months down the road and saying that they referred someone but didn't get anything for it. I made up a form that had to be filled out at the time of the sale if there was a referral. A copy was kept in the file after the gift was issued. If it wasn't mentioned at the time of the sale, the jacket promotion wasn't allowed. Keep in mind that we asked EVERYONE how they heard of our store and if they were referred.

Do a large promotion of few times a year and make it worthwhile! What do your customer feel is good value? What have you budgeted for these type of promotions? The result is usually relative to the effort put into it. Advertise it in your quarterly newsletter, on your store front windows, in-store signage and do a flyer up that you can stuff in the bags when customers come in to purchase chemicals.

An in store credit always works well as it promotes shoppers to purchase from your store as well as become more comfortable with your line of watercare products.

Steve

[stuart]

It always amazes me, Steve will dissapear for a few days and then WHAM! Come in with an article sized post full of profound and usefull info... What a guy!

[TALKCalgary.com]

Personally - I am happy to refer anyone to a company (or individual) who provides good service. It’s not something that I expect to get a kickback for. I am just happy to see a friend make a good purchase they will be happy with, while at the same time helping support a local trader - who in turn takes care of our spa. I think this is called synergy  

[Chas]

We don't offer cash or other incentives, but we get a tremedous number of referrals.  Everytime it gets close to half our biz my media people tell me I'm not advertising enough, and everytime it drops to about 30% I start puttin' the heat on the whole team to get back to doing those little touches from start to finish.

[Steve]

It always amazes me, Steve will dissapear for a few days and then WHAM! Come in with an article sized post full of profound and usefull info... What a guy!

Thanks Stu. Coming from you, that means a lot to me.  

Steve

[Spa_Tech]

My only suggestion is to have specific criteria. You don't want customers coming in 3 months down the road and saying that they referred someone but didn't get anything for it. I made up a form that had to be filled out at the time of the sale if there was a referral. A copy was kept in the file after the gift was issued. If it wasn't mentioned at the time of the sale, the jacket promotion wasn't allowed. Keep in mind that we asked EVERYONE how they heard of our store and if they were referred.

Oh my, yes-- qualifying criteria is ESSENTIAL.

There are a small portion of the population that would love to exploit referral benefits- either by outright fraud or simply trying to take advantage of a small town situation.

Here's how I handle referals;

Upon completion of the sale or on orientation, I solicit referals by leaving a card issued in the new spa owners name.

The card reads as follows; "This referral reward certificate is issued to (John Z Customer). This person referred your product to me and I'd like to make sure they can collect their $50.00 cash reward after I've taken delivery on my new spa. While I may not be ready for delivery today, I am interested in more information. My name and address follows."

This card is a vehicle for two purposes- 1) It establishes credibility and credit for the person referring and 2) collects essential information that can be added to a database to qualify prospects as genuine leads. After the referral reward card comes in, and a purchase is made, I dial up the person who made the referral and offer to issue more reward cards and arrange to pay them their reward. Rewards arent paid out without them.

The referral dynamic however, will change once I begin retailing a premium product, and be tiered to reflect a different level of rewards for each purchase.

Dont get me wrong- I dont want to paint a picture that referrals are the 'end all be all' of business survival- but they sure help.