A reward for a referral should be an element of surprise, not a bribe.  If your business is good enough, there will be natural recommendations – if you have to bribe your customers & make the process more than one step…you loose the credibility in which good recommendations are given.

I am not saying that your customers shouldn’t be aware that there are perks when friends take you up on your recommendations, just don’t make it more steps than “did anyone recommend you to visit us today sir?”

Example 1:
We have all seen the DirecTV ads that your friends are worth $100 each when you give your account info to your friend, your friend is then suppsed to tell the person on the other end of the phone that they were recommended by Dick & Jane who then are rewarded the cash.  Ick.  Who does that? Who solicits their friends like that?
Why doesn’t DirecTV just ask the new customer if anyone recommended them and THEN DirecTV rewards the person with a credit and a thank you note on their bill.  I don’t know what the success rate of DTV’s new campaign is, but I can tell you that their reputation for antiquated marketing ideas is being noticed in my circles (when it comes to making their current customers feel “special”…and yes, I expect to feel special as your customer).
And just a side note, I am in L-O-V-E with my DirecTV.  They have taken care of me more than once via Twitter & I spread the love to anyone who asks if we are happy.

Example 2:
My dentist – Dr. Higginson at Lighthouse Dental in Eagle.  I love this guy…he has a nickname in our house…Dr. Happy.  He makes you feel so good about having a root canal!  They sent out in the mail a really nice newsletter that had some great information on it as to what they were up to in the office & outside in their personal lives as well, I really enjoyed it (of course my head was spinning…this should be a blog too!).  They enclosed a referral card that I have to sign (you can print one as well from their website) and then give to a friend who has to be responsible for giving it to the front when signing in.
Again, why can’t you just ask the question: “Did anyone refer you today sir?”  This actually happened to me a few years back.  On a follow up root canal visit, Dr. Higginson made a point to tell me that he had at least 4 people come in from my work & volunteer that they heard Lighthouse Dental was the place to go.  He adjusted my bill right then & there and said “Thank you so much, it means a lot to us.”  I didn’t need the incentive of a movie or dinner to give the recommendation, I did it because he is good and I wanted to tell people about it.

ROI?:
Can this be tracked just by asking and not having official cards? I am not a programmer, but my guess is that there is referral software out there that would keep track of how referred who & when.  Or I think Excel would work just fine.

Lesson Learned:
Don’t beg and don’t make your customers beg to others. You have a great business, great customer service, great people and something  I don’t want to live with out.  Reward with surprise and not expected outcomes.