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Saturday, April 17, 2010

Want More Referrals? Pay for Them!

The other day I said I shoot for 85% referral-based enrollment at Aloha Beach Camp. That means for each group of 100 kids that enroll, I want at least 85 of them to come from another camp family -- the typical word of mouth referral we're all after.

Not only is word-of-mouth the most credible marketing you can get, it reduces your customer (camper) acquisition costs to virtually nothing.

But sometimes you have to pay for referrals...and you probably shouldn't mind. In fact, "paying" for referrals is a pretty good way to get them. I use any number of organized customer referral programs where I pay a financial reward to referring customers. One of the more effective ones goes something like this.

When a person signs up for camp based on another customer's referral, I reward the referring person with a letter and financial gift. The letter looks like this:

“Dear Mary, Thank you so much for referring John Smith to Aloha Beach Camp. He signed up for the same Enrollment Package you did. Because you did such a nice thing for me, I'd like to return the favor. Enclosed please find a check for $50. I value your business and the trust you've put in us. Here's to a great summer, Eric Naftulin.”

Now there's just one catch. As you probably already know, people are motivated by money...especially when it's easy work like telling their friends about your camp. So if you adopt this "pay-for-referral" technique, watch out. Once your customers get their hands on your cash, they'll want more. So get ready for a steady stream of referrals.

Every camp should have an organized customer referral plan in place. Paying for referrals isn't a bad idea, especially if you want a flood of them.

And that is what you want....right??

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