How to Build a Referral Process as an Entrepreneur

Have you invested in a referral process for your business? Referrals are a way to drive new customers or sales by word of mouth. Your friends, family, partners, clients, and other business connections refer people in their network to you. It’s a super simple way to earn new business.

But… as with everything, you need a good process in place so they can have a great experience with you. So, in this article, I’m talking about how to build a referral process so you can ensure people keep coming back for more.

Why Referrals?

There are tons of benefits to creating a referral program for your business. Here are a few of my favorites!

Quality Leads

Word of mouth is a powerful tool. When a product or service is recommended by a friend or family member, potential customers are more likely to trust the recommendation (AKA you!) Referral programs help establish credibility for the brand and increase the likelihood of conversion. Referrals also usually end up being higher-quality leads because they come from existing satisfied clients who understand the value of your services. 

Organic Marketing

Referrals are an organic marketing strategy. You can leverage your existing or past clients to bring in new customers through word-of-mouth recommendations. As satisfied customers spread the word about your services, you expand your reach organically.

Brand Loyalty

I recommend offering some kind of reward for the person who is referring you to their network. Knowing they can earn rewards by referring friends and family members incentivizes them to stay engaged with you. It’s also a nice gesture to say thank you!

Referral program for entrepreneurs

How to Build a Referral Process

Now let’s get into the nitty-gritty of how to build a referral process. These are the steps I use for my business and help my clients set up! If you need some guidance, you can purchase my Quick Wins Workshop | Setting up a Referral System in Airtable guide.

1. Set Clear Objectives

First, you need to decide what you want to achieve. Are you aiming to earn new clients? Are you trying to boost course sales with affiliates? Do you want more email subscribers? You can have multiple systems for each of these objectives, but pick one to start.

2. Identify Your Target Audience

If you’re trying to earn new clients, utilize current or past clients. Ask your network to refer people to you who they know need your services. Your clients have worked with you, so they can clearly articulate to their network what it’s like to work with you firsthand.

Marketing a course, coaching program, or mentorship will also probably require reaching out to your current or former clients. See if they’re interested in being an affiliate and earning a portion of each sale they refer to you.

3. Define Incentives

How will you incentivize your network to refer you? Some people will do it out of the goodness of their hearts (bless ’em). But most are more likely to do it if there’s something in it for them. Ensure the incentives are attractive enough to motivate people to participate in your referral program.

Affiliate-type referral programs are easy – offer a percentage or set dollar amount for each sale they refer to you. Decide how much that is depending on the cost of your program (typically 5-10%)

If you’re asking for new clients, I like to offer gift cards. I send gift cards ONLY after their referral has signed a contract with me. Just to make sure this person actually goes through with hiring me 😉 I’ve seen other people offer discounts on future services for referrals. I chose not to go that route, but there’s nothing wrong with it if that works for you and your business!

4. Choose a Referral Method

Next, decide how customers will refer others to your business. Common methods include sharing a unique referral link, sending email invitations, or using social media. Choose a method that is convenient for your customers and aligns with your business’s communication channels. I recommend using Airtable for this because it captures new leads and the people referring you, and can automatically send incentives!

5. Create Compelling Messaging

When asking your clients for referrals, make sure the rules of the program are clear. No one should be confused about what you’re asking for. Highlight the benefits of your product or service (current and former clients should already know this!), emphasize the value of the referral incentive, and make it easy for customers to understand how the referral process works.

6. Implement Tracking and Analytics

Set up a way to track the performance of your referral program. Use analytics to identify which referral strategies are most effective and optimize your process accordingly. Here are some key metrics to track: 

  • Number of referrals
  • Conversion rates
  • Lifetime value of referred customers
  • Amount paid in incentives

7. Promote Your Referral Program

It’s time to spread the word about your referral program! I typically send a personalized email to my current and former clients asking them for referrals. It doesn’t need to be anything fancy. Here’s the structure I usually use in these emails:

  • Thank the client for their loyalty
  • Ask if they know anyone in their network who could benefit from my services
  • Explain how I want them to refer me (via web page, send them my email, etc.)
  • Tell them the incentive
  • Thank them for keeping me in mind

8. Monitor and Optimize

Review the performance of your referral program and make adjustments as needed. Analyze feedback from clients, track the success of different referral methods, and experiment with new incentives or messaging to improve results over time.

Referral programs have made a huge difference in my business. I’ve earned new clients, sold more products in my shop, and built my email list by leveraging my network. Don’t underestimate the value of your clients!

About Solution Integrators

To keep it simple, I’m Ashley, a Chief Systems Officer. I take your complex problems and find ways to simplify them. My goal isn’t just to save you time (saving you time is the easy part!) – I want to fully level up the way you interact, manage, and fulfill offers for your clients. I want to help you provide a cohesive experience. An experience that not only feels like quality but looks that way, too. From onboarding to offboarding – I want to transform each phase of interaction from lead to signed client. Let’s work together!


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