Reward Buddy launched in 2019 after Luke Santamaria implemented and brought to life a referral program for a physio group that he managed.
From there, Luke saw an opportunity to help other businesses, especially those that aren’t digital and trade online, to leverage their word-of-mouth and grow their referral programs.
RewardBuddy is great for service-based businesses such as cafes, gyms, trades, health providers, and those that don’t have a lot of time or money to put into marketing but who rely on word-of-mouth and referrals.
The platform also helps retain clients with a loyalty reward aspect with a points system for using businesses on the platform as well as reviewing businesses on the platform. The great thing is, those points can be used with any business on RewardBuddy.
Further, the platform provides the flexibility for businesses to create and implement bespoke reward programs so they aren’t forced into a one size fits all or pre-determined packages.
One of the advantages of the platform is that through a business’ reward system, they are collecting names and contact details of their customers; something that is sadly overlooked by a lot of small and medium businesses.
I found out about RewardBuddy on a Facebook group I am a member of where Luke had posted an article titled, 8 Ways To Get More Customer Referrals. I thought it had some great and practical advice especially for those on limited budgets because a lot of what Luke talks about can be implemented without spending a lot of money.
Being the passionate word-of-mouth and referral advocate he is, Luke went way overtime on covering the eight ways to get more customer referrals. As such, I’ve split the chat with Luke up into two episodes. You’ll hear the first half here, in episode 18, and the second half in episode 19.
You can get in contact with Luke on hello at rewardbuddy.com.au or head to RewardBuddy to find out more.
As part of the service, I have had this episode transcribed. Transcribing, proofing, and editing a podcast episode is A LOT of work. That’s why I use a service called REV who provide professional freelance transcriptionists who are vetted for quality. While they offer a 99% accuracy guarantee, I do not proof-read their work extensively. Instead, I simply copy and paste below and, as such, please note that this is not be a verbatim transcript of the episode and I have trimmed things like the intro, close, and mid-show ad.
They’re often overlooked by small business, service based businesses, purely because it hasn’t really been something that people really, as a small business owner think about. It is something that online based businesses do think about quite a bit, eCommerce businesses, Uber’s, those types of businesses, but it really hasn’t been sort of a front of mind marketing tactic for small base businesses. I think that’s because of a number of reasons. One is, small businesses often just don’t have the time, so it could be just sole owner, they don’t have the time to market or think about ways to grow referrals and word of mouth. They’re often just trying to get by, and look after their staff, and make sure their customers are happy. Having that extra time to market, and even actually pay someone to do that is often not there for them. I think that’s the main reason why they just don’t have that ability to think about getting referrals and promoting them.
Sometimes I think they tend to just rely on doing a good job, giving good service and they assume that’s going to result in someone referring off to them and often that’s not the case. People they want to refer, but often they don’t, and there’s actually a stat out there that 86% of satisfied customers who want to refer a business, out of those people only 29% actually do. I think there’s just that element of they provide a great service, but they don’t often push someone or ask someone, to encourage them, to refer someone to them
That sets us up well for how businesses can encourage word of mouth and grow their referral marketing. You’ve written a great article, and that’s why I asked you to come on the show and talk through it, because in it, you list a bunch of approaches that people can leverage to help build their word of mouth and referrals. The first on your list of the eight that you’ve provided, it seems pretty obvious, and that is just to simply ask your clients for referrals.
Yeah, it is pretty simple when you think about it, but I think there’s a few reasons why people don’t ask for referrals. I think one of the big reasons is that it can be quite confronting, and I just go back to my time is when I managed a couple of physio clinics. Just the being a physio, and there was a bit of a fee of a reflection on you as a person or a practitioner of you ask for a referral. There was a bit of a fear of being salesy, or worrying about what someone might think of you when you ask for a referral, so I think it can be a little bit of fear of failure, or worrying about what someone might think of you when you do ask for it. As I mentioned earlier, just relying on your miles and the fact you’re giving a good service often you think that’s going to be enough, so you just don’t end up asking your customers.
It takes time as well, and requires a lot of diligence in constantly thinking about, “Should I ask this person for referral?” Or “I’ve given this customer great experience, they seem happy. I need to ask them,” so one, thinking about that in the time, and then taking the time to ask them or come up with a way to ask them is tough. As I mentioned before, small business owners, they’ve just got so much on their plate, they don’t tend to think about those types of things.
In terms of asking for referrals, there’s a number of ways that a business owner could ask someone to do it. They could ask them face-to-face, they could send them a text, they can send them an email and ask them, they can use social media to post out and ask people for referrals. The channels are they for small business owners to leverage off referrals, and there’s so many business owners out there giving a great service, it’s just a matter of having a structure to allow them to do that.
Then some other things that are important, I guess, about asking for referrals are you got to choose the right customer. You obviously don’t want to choose someone who doesn’t seem too happy with your service, or you weren’t too happy with it yourself. They’re not going to be the type of person that you want to ask for a referral, because for whatever reason, they might not be your ideal customer, it just didn’t work out. Choosing the right customer that you’ve had, given a great experience with, you’ve connected really well with, is really important, so you want to make sure that they’re the type of people you’re asking for a referral.
And the last thing is just the timing, and it comes down to, when do you actually ask someone for a referral? When I used to treat people as a physio, you’re not going to ask them in the very first session that you meet them, you haven’t developed a relationship with them. It’s going to be quite awkward if you’re asking for them to refer you off to someone when you haven’t even dug into their pain in any way. You really want to time it well, so that someone is… You know they’re happy with their service. You’ve developed a good relationship with them, and you can, you can pinpoint that time when to do it, which can be a little bit hard for a business, like a mechanic or something like that. You see them once off, but it’s just about timing it and feeling that the time was right to ask them.
A great experience and delivering good customer service seems to be a theme pretty early on in this chat, Luke. That is the basis for number two, it is give your customers a great experience. It really is the foundation from which you need to have before you can build your referral marketing, isn’t it?
I think I mentioned a little bit briefly before, but yeah, if you don’t give a customer great experience. They really won’t look to recommend you. I’m sure most people can agree that no one really is going to recommend someone who gives poor service. I’ve never had a mate who comes to me and said, “I had my mechanic the other day really make a meal on my engine, but you definitely should go see him anyway,” you just don’t get that. I think these days, people expect a lot in terms of service and they expect the best, and they expect it for very little in terms of payment. You really need to give them, above and beyond what you’d think that they would expect. It’s not just enough to sort of give them your service these days, it’s adding those little extra things in that they’re not going to expect.
Thinking about, “Okay, how do I actually stand out from the crowd here amongst my competitors who may be giving a similar quality of service, but if I can just give that little bit extra, that’s unexpected.” That’s what gets you over the line in terms of someone really wanting to refer you. Now, I go back to my physio days again, where I would tell my physios that, “You’re great physios, you give them great outcomes, but we need to do these little extra things,” and one of them was just simply calling up that patient three months after they’d been discharged. And just talking about, how are you? Where you’re at with things? And that patient wasn’t expecting it, but they loved it. You’re not there to get them back, or get them to spend more money with you. It’s just simply showing them that you care, so that can push, be shown in different businesses in different ways, but I think that’s key, just going that little extra mile for your clients.
Yeah, and it’s great advice. A lot of business coaches, a lot of marketers will talk to their clients, and people around how you can surprise and delight your customers. And as you said, it can be something that doesn’t take a lot of time or cost a lot of money, but you can still surprise and delight the customer, which will build the relationship with them, and hopefully encourage them to provide referrals, and great word of mouth.
Number three on the list is reward your customers for referrals. How do people approach that? Is there a way to automate it, if a business has like a really large number of customers and lots of turnover?
This one’s interesting, and I think it comes down to explaining a lot about what RewardBuddy is about, but I think one thing is to, as I said before, is to really give a great service, and sometimes just giving a great service isn’t enough. As I said before, there’s a big stat to say that people want to refer when they’re happy, but they just don’t do it a lot of the time. It’s really those top A plus grade customers that tend to refer off their own bat, but a majority of them just don’t do it. People these days, they’re very busy compared to a couple of decades ago. They’ve got their families, they’ve got their jobs, they just don’t have that time to think about referring businesses off unless they’ve gone above and beyond. Businesses should start to think about, “Okay, how do I actually bridge that gap to turn someone from a satisfied customer into someone who actually refers? What are the things I can do to actually transition into that?”
Some of the big companies around the world… I think I mentioned Uber, Airbnb, they actually grew their initial database of customers and of Uber drivers with referral programs. They rewarded people for referring others. That was one thing that I really found interesting, and there’s a lot of businesses out there, especially eCommerce that reward customers for referrals, and it really helps them grow their customers base. But as I mentioned, there’s really not much out there for offline service based businesses to do so.
In terms of automating it, there’s quite a variety of ways that you can go about it. A lot of these referral programs, for instance, Uber, they’ll give you $10 off your next ride if you refer someone to jump on board with them or ride with them. Things like discounts like they’ve done, gifts, adding someone into a competition, draw to win a certain prize. You can offer them anything you want, really as a reward, but I think what it comes down to really, is giving them something that they really want. Really thinking about who’s your customer, who’s your ideal customer, and what are they going to want as a reward? Do they care about gifts? Do they care about getting a discount? What is it? You really have to drill down and know about your customer to work out what reward is actually going to be something that they want to get, when they actually go to refer someone.
The other thing that Uber do is they tend to reward the referrer, and the person who actually redeems that referral. The big thing about referral programs and automating them is making sure you reward both sides, because often the incentive, if you’re only rewarding the referrer and the person that they’re sending off to your business doesn’t get rewarded, then that incentive to use that businesses isn’t as big and vice versa. It’s very rewarding in terms of offering rewards for referrals.
In terms of preferred customers, they have much higher lifetime value in terms of what they spend at a business. It’s actually, they spend as much as 16% higher than a normal customer would, so it definitely pays off for a business to get referred customers, because they tend to be more loyal. They like and trust you, because they’ve come from a recommendation from someone they know.
Oh, I think that’s a great point that you make around incentivizing the person that’s been referred to actually act on that referral, because I think a lot of businesses just look at trying to get their existing customer, to make the referral and just purely rely on the relationship that that person has, who’s making the referral, to the person they’re making the referral to. Just assuming that that’s going to be powerful enough to influence the new customer to potentially come to them, so I think that’s a great point that you make.
The other thing that will influence people is online reviews. They provide social proof that a business can actually do what they say they can do, and that’s number four on your list, is to build your customer reviews online. It is almost a given for people looking for a business online these days, right? It has, a lot of the time, become part of the process, especially when we consider how prominently Google puts them in the search results with the big gold stars.
Reviews are huge thing these days, and while we talk about recommendations from friends and family, stats show that that’s the number one way people decide to purchase from a business. It’s very closely followed by reviews, so people really put a lot of loading on reviews, and it’s very rare these days for someone to make a purchase decision without looking at reviews of that business, especially if they’ve never heard of them before. You sort of really need to look at having a combination of getting recommendations from friends, but also having a good solid level of reviews in place to show that you can deliver what you’re saying you deliver.
Sometimes the referral is not enough. Someone can get referred from a friend and it can be a trusted friend, but they still want to do their own research. They still have their own value systems, and while they trust their friend’s recommendation, they often trust their own intuition as well. This obviously will lead to them getting a recommendation, but looking at your reviews and making their own decision on whether they can trust you. For instance, if a business offered the same plumbing service as Joe down the road, but you have the reviews to back it up, that can be just that little bit of difference to make that customer more likely to jump on board with you. Especially if you’ve got a service that there is a lot of competition in your area. It’s all those little things you just need to give that customer, that extra level of boost to make that decision to purchase with you.
I guess it’s the same with asking for referrals, is you should ask for reviews as well. People tend to just not do them off their own bat unless you’re asked. I think there’s the same anxiety for some owners around that asking for reviews, it can go against their values and they can feel salesy or there might be a fear of how they may look. I think getting over that and understanding what reviews mean, and knowing that customers are happy to give them.
Then lastly, just making sure it’s easy. The more you show someone that they can have a channel to write a review the easier it’ll be for them to do it. When we ran our physio clinics, we had review lists on the dash of the admin desk. We had a poster up on the wall, we had some in each of the rooms, we had on our website and our emails. While that can sometimes seem like overkill to some people, I think it’s really important just to keep it front of mind. You’re just giving people the best opportunity to write that for you.
Luke, that’s a great chat, lots of easy and practical advice that all businesses can implement, whether, I don’t know, they’re a local florist or they’re a larger business, like a builder or a consulting firm. That is what RewardBuddy is all about. Now is your time to shine and go deep. Tell us about RewardBuddy, give it a plug. How can people find out about it? How can they get involved, and how can they stay up to date with what you’re doing?
Yeah, RewardBuddy essentially just gives a small business the ability to have their own rewards program, and that involves allowing them to reward their clients for referring and also for constantly coming back and purchasing with them. I guess the reason I created it is I wanted to help small businesses have what online businesses have in terms of leveraging referral systems and helping them find more clients, basically.
In terms of how it works, it’s free for customers to sign up. In terms of businesses, it is a one month free trial, so if they wanted to test it out, they just have to contact me. My email’s, hello at rewardbuddy.com.au, and essentially I’ll set up a listing for them, create the rewards program for them. They can sort of pick and choose how they want to do the rewards program, and what type of rewards they’d like to offer. Yeah, for the month they generally go from there and decide if they want to continue. It’s really a no risk way of trying to find new customers.
Outstanding, and we’ll put all the links to all those things, your email, and a link to the RewardBuddy website, so listeners just head along to the show email@example.com, or you can head straight to rewardbuddy.com.au and find out more about it. Luke Santamaria, founder at RewardBuddy. Thank you so much for coming on the Marketing Builder podcast and sharing your expertise around ways to get more customer referrals.
having me on.