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Referral cards provide ammunition to your active promoters

You know those little cards that muddle up your wallet? The loyalty cards that rest in piles on the counter or coffee or sandwich shops.

At one time I probably had 10 different cards, each of them with a single over-inked stamp or moon-shaped punch hole. “Here you go, you’re only 14 stamps away from a free small coffee!”

Ernstos4110The next time I ever saw them was when I would survey the damage after leaving my wallet in my jeans on laundry day. In retrospect, they weren’t really that effective - at least in bringing me back to buy more.

Because let’s be honest - loyalty programs are created to, well, promote loyalty. Repeat customers. More revenue. But for many companies the punch card never finds its way back.

“But that’s not true, I use my Palmers partner card every week!” you say. Yes, so do I. But that's because they put a lot of meat on their club sandwich and the lady behind the counter has a nice smile - not because of the little yellow card slowly disintegrating next to my driver’s license.

My point? In order for a loyalty program to be effective it needs to have value. Enough value that it will inspire a customer to shop with you over a competitor.

Loyalty programs come in all kinds of shapes and sizes. Punch cards, plastic cards, cards you can attach to your keychain, cards on your smartphone, and so on. They are intended to reward the customer for repeat business. More advanced programs are also designed to track purchases and tailor marketing efforts.

Referral card

But there is one type of card I have yet to mention. The referral card. Whereas the focus of loyalty programs is on promoting repeat business; referral cards leverage existing customers to bring new blood in the door.

I am sure you have seen businesses hand out cards that promote an incentive-based referral program. On the card is nothing more than “refer a friend, get 10 bucks” or something of that nature. That is not a referral card.

What I am talking about is something that a business provides their customers that they can give to their friends and family that has exclusive value to the recipient.

For example, two golf lessons at a country club valid only for Bob’s friends and family. In order for the card to have value it must be an exclusive offer that is not promoted elsewhere. The only way for a new client to get this specific deal is via an existing client.

This way your client will feel they are giving something of actual value to their friend when they are referring you. If it is a coupon that you can find in the Sunday paper its value vanishes (and is embarrassing to give away).

You may also consider pairing the exclusive offer with an incentive for your client. For example, a card that will reward both the existing client and the new guy. This way way your clients will have more of a reason to hand them out, and the prospects will feel more obligated to use them.

Referralcard1By empowering your loyal customers to bring in their friends and family you are also facilitating conversation that strengthens your brand. Referral cards will get people giving the gift of your business - as long as you make it worth their while to do so.

Remember - make it exclusive, limited, and valuable.

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