Word-of-mouth recommendations are incredibly important for anyone looking to grow their client or customer numbers. Whether it’s from family, friends, or anyone else you respect for their knowledge and opinions, you’re much more likely to check out something they’ve shared. But it can be difficult to scale unless you know how to set up a referral scheme for your self-employed business.
As a solo consultant or freelancer, you might have informal agreements or commissions already in place. And these can work perfectly well if you only need a small number of referrals each year, although it’s always a good idea to have a clear written contract in place to avoid any confusion in the future.
But a formal referral or affiliate program can help you to grow much more quickly if your self-employed business needs much larger customer numbers in a short space of time, allowing people to recommend you without requiring a personal connection or conversation.
And while the self-employed and freelance industry is typically good at sharing recommendations for people and services, your clients and customers might not be part of those communities.
What is a referral scheme or affiliate program?
A referral scheme is any method which rewards clients, customers, or other people for recommending a business. This is usually managed by creating discount codes or affiliate links which can be shared via your product packaging, marketing or anywhere online.
It’s fairly easy to set up a custom website address manually and track the results via your analytics software on a small scale, but larger referral and affiliate schemes will tend to use dedicated platforms to manage everything. This makes it easier to monitor results, set terms and conditions for anyone using your referral scheme, and share useful assets and other material.
Why set up a referral scheme?
How often have you found yourself acting on a recommendation from family, friends, or colleagues? It often happens more than you might realise, with even implicit endorsements having an impact on your buying habits. A lot of brands get bought every week because it’s what your parents chose when you were growing up, for example.
Referral schemes build trust by encouraging people to recommend your business to their personal networks. While any reward might remind them to mention your brand or company, having clear messaging and offers will also ensure you’re communicating exactly what you offer, and point people to the right places or products to get a good introduction to you.
Referrals also tend to reach new customers and clients at a lower cost than many other promotional and marketing campaigns, as you’re only paying for a successful conversion. And you’re more likely to secure that new business than from people viewing a random advert, because most recommendations will be made to friends or contacts who are looking for a similar product or service at the moment.
You can also increase the effectiveness of referrals by integrating them with a customer relationship management (CRM) system to follow up with prospective buyers and build more personal connections over time.
How to create a referral scheme for your business
Whatever specific platforms you use to implement a referral or affiliate scheme for your business, the steps required to be successful will be the same.
- Set targets and KPIs
Before setting up a referral or affiliate scheme, it’s important to know what you want to achieve from it. Whether you want to increase email sign-ups, potential clients, conversion rates or revenue, this informs the incentives, assets, and approach you take. - Choose the incentives
If you’re offering a discount or commission, it’s important to make sure referral sales are still worthwhile and profitable.
Alternatives to financial rewards can include free upgrades to products and services, or branded merchandise. For example, if you’re targeting email newsletter sign-ups, you could offer an extra eBook download to anyone sending a referral, and to those signing up as a result. Or you could highlight the biggest referrers each month in the next edition as a thank you. - Design your program and landing pages
Alongside the assets for your referral scheme, it’s worth creating specific pages on your website for each campaign. This lets you introduce your business, explain your offer, and give people the chance to complete a conversion much more easily than simply sending them to your homepage and hoping they find their way to making a purchase or contacting you about potential work. - Test, measure and evolve your offers and rewards
Having set goals and KPIs, you should be able to monitor whether your referral scheme is working effectively or not. It’s important to check which channels are working effectively (emails, social networks, etc), and whether any are underperforming, in which case you may want to test different messaging.
If traffic isn’t converting when it’s arrived at your website, there may be an issue with your landing page. Or your sales and contact pages.
Examples of self-employed and freelance referral marketing
The SEOFOMO email newsletter has grown to more than 26,000 subscribers in just a few years, and one of the reasons is the tiered rewards offered in each edition. These range from getting a shout out on Twitter from well-known founder and consultant Aleyda Solis for referring two subscribers, to a personal SEO Q&A session and branded backpack if you encourage 500 people to sign up.
At IPSE we also offer a referral program which not only rewards you, but also saves your friends and contacts money on their membership. That means everyone benefits from the scheme, and it’s incredibly quick and simple to use.
More help to grow your self-employed business
Whether you’re looking to increase your prices and rates, client numbers, or your overall income, we’ve created an advice section dedicated to growing your self-employed business covering a range of different approaches and techniques.
IPSE members also get access to an ongoing series of exclusive events covering topics including marketing and promoting your business, along with useful templates, contracts and more in the Business Hub, tax and legal helplines, and much more.
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