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The Magic Cafe Forum Index » » Tricky business » » Referral programs and systems (1 Likes) Printer Friendly Version

Fedora
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Several businesses have attributed a large amount of there success on
there word of mouth programs, has anyone reading this had or currently have
any sort of referral program?

To clarify what I'm referring to for those unfamiliar, a referral program is a promotion
of sorts where a reward is given to your past customers or clients for recommending
your products or services to friends, family, co workers etc.

For example, if a client recommends to a friend your services,
and they end up buying from you, they receive $50.
in this example the referer is rewarded.

Another is offering a discount to the referee, for example, a past client recommends your service
to a friend, and that friend gets 10 percent off there purchase.

often a combination of the two are offered.

Another version, that's possibly outside of the scope of the question, is a referral program
offered to a venue, ie wedding venue, party center, etc.
For example, offering the venue a cash reward for recommending your services to
there customers.

this is a little different because it's less about word of mouth between clients,
this can also be more expensive, because it has to be worth the venues effort,
there may also be other folks trying to sell there services as well, and the venue will most
likely recommend the service that makes the most for themselves.

So all that being said, what's your experience with referral programs been like?
Obviously whether something like this would be useful to you depends on your
target market.

There's more to eliciting referrals than rewards programs, any tips for systems
to elicit referrals would be beneficial to many Café members I believe.
Fedora
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I should mention that the best referral system is
having a show worth recommending.

No system or program will do you any good if folks don't
trust your quality.
Mindpro
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I'm surprised no one has chimed in on this. It depends on what you mean about referral programs and the types of referral programs.

I do not work consumer markets for the most part, but one of my agencies that does uses referral programs but not to the public, customers, clients, or attendees. Yet in my other businesses, as I have previously mentioned here, we did an experiment many years ago to try to stop all of the different advertising methods we did each year (saving thousands of dollars) and just focused on a referral from other professionals. We created a network of venues, businesses, and industry professionals. Although it was a temporary experience we have never gone back to paid advertising and only use referrals for new business. We even adapted our business model based on this.

I was the first to strike a deal with the largest party center business in America, which generate far greater results than expected. For my one business that specialized in weddings, we had a network of over 100 related businesses in a referral program that paid them $100 for each referral booking we received. It was very successful and well-accepted.

Now as you said your show or business must be top-notch without exception. Also, we had proprietary offerings that were unique to us which appealed to many of the venues and businesses. We created these specifically for the industry and of course, everyone wanted to be a part of it. It eventually led us to the creation of what is now The Knot, generating millions of dollars each year.

Yes, trust and credibility are essential, as is a stellar reputation.
Dannydoyle
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There is a right way to do this and a very wrong way to do it.

Trying to randomly incentivize strangers is not as effective as it seems. Doing targeted incentives to those who have access actually works quite well.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
Mindpro
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There ya go!
Fedora
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Thanks for the input mindpro,

I also thought this tread would get more attention, figured more folks
on the Café would have tryed such a program at some point.

Didn't know you were involved in the founding of "the knot",
This seems to be a big year for weddings, they're probably getting a lot of traffic
right now.

Danny, you may be right, if I ever have such a program (and I remember this thread)
I'll post the results.
Mindpro
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I don't think many performers put too much thought or effort into understanding that referral systems are actually part of marketing and advertising. It is a great, cost-effective way to market that can create some great results.

Marketing is about finding, generating, and creating warm and hot prospects, and referral systems are an ideal way to do this.

I hear so many performers say they get stuck when it comes to marketing and advertising, and what usually ends up happening is they "try" new methods, techniques, and resources that can be costly only to get little or no results. They then deem these methods as "no good," "didn't work," and "I've tried that and got no results" which is often incorrect. They tried it once, usually without complete commitment, and never allowed the process to properly play out over time through consistency.

Referral systems can be the same way. Many performers think they have done/are doing a referral system but in reality, really don't have a true structured system in place to work consistently and build over time.

Many performers will send an email stating some type of referral offer, or in an after-performance survey that includes such a generic blanket referral offer. I've seen so many "gurus" say to ask each client for the names and contact information of at least 5 people/businesses that they think "would enjoy our performing services." Ask many people that have attempted this. One of two things happens...1.) they try it once to a few times with little or no results and stop doing this altogether, or 2.) even if they happen to get a couple of responses, they soon find that most people will not do this and soon, due to no or minimal responses, the performer ceases doing it.

These are not real referral programs. These are simply planting a seed that "hey, if you know anyone..." which if they do, would likely happen organically on its own. But this is not s structured referral system.

Referral systems can be greatly beneficial especially to those working consumer markets because it can be so easy due to available resources, but most magicians simply are not good at their business practices, only want to focus on their performance, and never commit to creating such a structured program.

Referral programs can always be part of any entertainer's business but should be especially important to newer performers such as those just starting out or say in their first 5-7 years of business. During this point in business, you are in need of new business. You can only survive by seeking and generating new business. After the 7-year mark businesses can operate on maybe a 50/50 balance of new business (including referrals) and return business. Then of course later in your business or performing career, say after years 12 to 15, the balance may be 75% return business and 25% new business. If you want your business to continue to grow, even if you have great return business, you always need at least 20-25% new business even for older, long-established businesses.

So it is important to learn, understand (really understand), and know the significance of referrals and referral business and the role it plays in your business's overall success.

This topic creates great food for thought, or at least should, for many performers missing this important component to their business operational system and to their overall entertainment business Success.
Fedora
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Thank you mindpro, you've given me some things to consider.
Mindpro
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I enjoy the topics and theads that you start, I just wish there was more action and conversation here.
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