5 Steps to Starting, and Maintaining, an Effective Customer Referral Program

Every pest control business has available to them one of the single most effective marketing tools—their customers. Forbes online highlights that 92 percent of consumers believe recommendations from friends and family over all forms of advertising, yet only 64 percent of marketing professionals believe word-of-mouth is the most effective form of marketing, and just 6 percent believe they have mastered it. Marketers in all industries, including professional pest management, are so focused on gaining new customers that they sometimes overlook the importance of cultivating the relationships they already have. Here’s a look at just how important current customers truly are to the growth of your business.

A study conducted by the Word of Mouth Marketing Association (yes, there really is one!) found word-of-mouth marketing drives $6 trillion of annual consumer spending and is estimated to account for 13 percent of consumer sales. The Harvard Business Review also states the lifetime value of a referred customer is 16 percent higher than that of non-referred customers, and referred customers also churn 18 percent less than non-referred customers. These statistics are staggering, and underscore the need for pest management companies to institute customer referral programs to better position themselves for long-term success.

When properly implemented, customer referral programs can turn happy customers into loyal advocates. But there is a catch—companies cannot simply assume that just because a customer is happy they will automatically refer new business to their network. Instead, businesses must give customers a reason to refer them, and to do that, a robust referral program must be in place. Getting one started may be easier than you think with these five steps.

1. Pinpoint referral sources

The first step in starting a referral program is to invite and monitor avenues of communication for company feedback to identify possible referral sources. These sources can range from current and past customers to open leads and vendors. Offering customers a way to provide feedback—through your website, online surveys or e-newsletters—is a great way to see who goes out of their way to offer their opinions about your business, especially favorable ones. Transactional feedback is also a great way to identify which customers are happy with their recent purchase and can be implemented at the point-of-sale on items such as receipts, offering free or discounted services should they wish to participate in a satisfaction survey. Social media is also a great tool to gauge customer satisfaction, as you can track specific mentions of your company across the web. If you spot someone tagging your pest control company in a Facebook post on how happy they are with your services, chances are they’re a great potential candidate for your referral program.

2. Identify meaningful incentives

Incentives are the reward you give to your advocates for successfully referring their network to your business and should be attractive enough to nudge someone into taking action on your behalf. For regular customers who are on a recurring service or maintenance plan, percentage or cash discounts on their program are the way to go. For first-time customers, or those customers that check in only when they have a pest problem, discounts will work, but so do other types of sweepstakes or small giveaways.

3. Contact potential advocates

After combing through the results of various referral sources and landing on a meaningful incentive model, it’s important to then contact potential advocates to get the process going. First, identify your core group of advocates that know and value your business and would refer you to their network without any incentives at all. Once these core contacts are identified, the next step is to reach out to them to take part in your referral program. Make sure to prioritize customers that also came from a referral, as their narrative is closely aligned with those of future customers you’re hoping to capture as a result of these efforts. As you embark on this step, be sure to also keep in mind the value proposition of your referral program. Questions to consider as you conduct outreach should include whether or not recommending your service will put the potential advocate in a good light with their own network, and if the reward you are offering is sufficient enough for them to tap into that network on your behalf. By having these talking points ready to go, you’re showing that you’re not only interested in expanding your own referral base, but are also ensuring that your advocates benefit from it as well.

4. Utilize communication platforms

After doing all of this legwork, it’s important to stay connected with potential advocates to not only remind them of your program, but also encourage them to take advantage of it. E-newsletters are a great tool to help entice customers to refer your business, as you can clearly spell out how you’d like them to refer someone, and offer them special discounts directly in return. Programs that incentivize both parties in the referral process are even more successful. Social media is another great way to engage with current customers, so be sure to remain active on social with relevant posts and engaging content that they can easily share with their network of friends as a testament to your credibility and reputation.

5. Track, track, track!

Pest control companies both large and small should implement some form of tracking system to ensure important information isn’t falling through the cracks. It’s important to know who was referred and by whom, when they were referred and whether or not they became a customer. Once these facts are deduced, it’s important to then categorize referrals based on the phase they are in, and how you plan to follow up with them in the future. Referrals that have yet to become customers require different outreach methods than those that have converted, yet both are equally important. Knowing when and why a referral came in provides insight into what they’re most interested in, and tracking when referrals converted allows you to see what they converted on so that you can market to them again in the future. Additionally, one of the most important aspects of tracking is to ensure existing customers who referred someone to your business are adequately rewarded, thus encouraging them to do so again in the future.

Because recommendations from friends and family are valued over all other forms of advertising, implementing a robust customer referral program is key to ensuring your company is positioned for long-term success. By pinpointing referral sources, identifying meaningful incentives, contacting potential advocates, utilizing various communication platforms and tracking acquisition cycles, you’ll ensure your happy customers turn into loyal advocates. ●

Cindy Mannes is the executive director of the Professional Pest Management Alliance. Visit www.npmapestworld.org/ppma for more information on how you can become involved.

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