RSS

Get automatic updates delivered straight to your inbox.

Connect with Steve Sipress

LinkedIn

How To Run An Effective Referral Contest

Matthew Lee Wins TV

Ask any business owner:

“Who’s the easiest person to sell to?”

and they’re bound to tell you it’s someone who was referred to them.

But is that really the case?

Let’s examine the following situation…

Who is more likely to purchase a brand-new iPad?

Person A: Loyal Apple customer, has bought an iPod, an iPhone and a Mac computer.

or

Person B: Has never bought a single Apple product, but his friend tells him “You should buy an iPad. They’re great.”

Still think the more likely iPad buyer is the referral?

Of course not.

The fact is…

The easiest person to sell to is the person who is already a customer.

Here’s another example…

Who is more likely to buy a ticket to a Bears game?

Person A: Loyal Bears fan, has bought tickets to many Bears games in the past, owns an official Bears jersey, has a Bears bumper sticker on his car.

or

Person B: Has never bought a ticket to any sporting event, but his friend tells him “You should buy a ticket to a Bears game. You’ll love it.”

I think you get my point.

We all know that in actuality, the easiest person to sell to is a current customer.

However…

The SECOND easiest person to sell to IS a referral.

And that’s what this blog post is all about: How To Get More Referrals.

Specifically…

How to Run A Referral Contest To Get A Flood Of New Customers, Clients, Patients Or Members

Over the past five years, I’ve run all kinds of different Referral Contests to help build my group “Chicagoland’s Sharpest Entrepreneurs” into the #1 business group in the area.

  • I’ve had drawings with one big winner of a 42” Flatscreen HDTV or an iPad

  • I’ve awarded prizes to everyone who refers even a single new member

  • I’ve run “hybrid” Referral Contests, awarding prizes for everyone who refers even a single new member PLUS having a drawing for one Grand Prize Winner out of all the referrers.

*NOTE: I’m assuming that you provide an excellent product or service. Otherwise, you shouldn’t expect many referrals, and I hope you won’t use any of the business-building strategies and tactics I teach until you fix this fundamental flaw in your business.

Now, assuming you’ve earned the right to ask for referrals…

Here are three general rules to follow to make sure your Referral Contest is effective:

  1. Choose The Right Prize(s) – You should have an idea what prize(s) your customers would consider valuable enough to get excited about winning. If not, conduct a survey and just ask them!

    Make sure to do the math when you decide on what prize(s) to award. For example: If your Lifetime Customer Value is $70, you only need to attract ten new customers to justify giving away an iPad in your contest. Every additional referral is pure gravy to you.

    And whatever you do, don’t scrimp on the prize(s)! Believe it or not, I once had a sales manager try to motivate me and his other salespeople to bring in big sales by offering us $5 Starbucks gift cards. If YOU don’t want to be laughed at, don’t be that guy!

  2. Create A Culture Of Referral – All leaders know that you will get more of whatever behavior you reward. So whenever you run a Referral Contest, make sure to give recognition to your top referrers all throughout the contest, using any means you can think of: List your contest leaders in your newsletter, put charts up on the walls of your business, promote your top referrers in social media posts, etc. This will motivate your contest leaders to keep pushing for more referrals, and will motivate those close behind to give extra effort to winning.

    When I ran multiple-month Referral Contests, for example, I named a top referrer my “Member Of The Month” for each of those contest months, and explained in the corresponding section of my newsletter that their consistent, quality referrals had earned them the recognition. My other members naturally recognized what behavior was expected of them and rewarded by me in my group.

    Also: For those who become new customers, clients, patients or members via a referral, it’s natural for them to feel “That’s what everyone does here” and start referring others.

  3. Make It Easy For Your Customers To Refer – There are a number of ways you can do this, including printing up referral cards, providing “swipe copy” so your people can simply “copy and paste” to create effective emails and social media posts to spread the word to their friends, family and associates, and using software to run contests on social media sites such as Facebook.

    *Advanced tip: You’ll make it MUCH easier for people to refer if you reward them for any prospects they point your way, regardless of whether those prospects actually become new customers of yours. You should accept the responsibility of putting an effective sales and marketing system into place to convert prospects into customers, instead of being lazy by expecting your customers to magically become expert salespeople for you and do the heavy lifting of converting their own referrals into your customers.

Want to see a Referral Contest in action?

I bought a brand-new iPad 4 and will be giving it away to my Top Referrer at this weekend’s big event that I’m hosting, featuring Perry Marshall, James Malinchak, Steve Clark and me teaching you two full days of advanced business-building strategies and tactics.

For full details about our Fall 2013 Success Summit, and to claim your FREE tickets (*if there are any still available) to come see who wins the iPad (yes, it could be YOU if you bring a few friends!), go to:

www.MyChicagoBusiness.com/summit

Hope to see you there!

One Response to How To Run An Effective Referral Contest

  1. Teri Viduna Reply

    April 3, 2015 at 12:37 pm

    I am looking for effective staffing contest to get more referrals.

Leave a Reply to Teri Viduna Cancel reply

Your email address will not be published. Required fields are marked *