I’m often asked during the Q & A portion of my live events if one should offer incentives (read: bribes) for their customers to provide them with referrals. Should they be offered cash? Perhaps, a gift?
I strongly suggest not doing that.
There are generally two challenges with offering incentives for referrals:
- If the referrals are not based on loyalty and “know, like and trust” but rather on reward alone, it tends not to be sustainable.
- (Most importantly) Those to whom you are referred will most likely feel resentful upon discovering they were referred because you bought and paid for the referral. How will they find out? When you tell them that they will receive an incentive for referring you to others.
This could result in their being not too pleased with the person who referred them. I know I’d feel that way, as would many with whom I’ve spoken.
Recently, I received an email from a firm that sells a high-ticket service to speakers. In the email, it said I would receive a referral fee for any speakers I referred. I wrote back (politely, of course) to let the salesperson know that not only could I not refer them without first knowing more about them through references, but that there were now two challenges:
- If the references are being bribed to refer, that tells me nothing about the quality of their work.
- There’s no way I would ever want another speaker to think I referred them because I was being paid to do so!
I suggested that — instead — they provide speaking professionals with amazing service and, as a result, they would do terrific via both proactive referral and reactive word-of-mouth. And, that’s what I would share with you.
So, my suggestion is to not offer inducements of any kind for referrals.
However, there is something you can do, which is actually much more effective.
And, we’ll discuss that in the next post.