I read a couple topics last night about referral discounts. I was loving indydebi's program - 5% of referral's order is a credit or taken off their invoice.

I spoke with my DH about it last night then and he doesn't think its necessary to 'give away' my product. He doesn't think it would work.

I'm all about incentives to spread the word - that's much cheaper than advertising and plus its a definite order! I'd like to know all your referral discount programs - I'd like to make this the easiest on the bride or whoever it may be - and I'd really like to not give them a credit AFTER their order is finalized, but I really don't see any way around that other than sending them a check.... any ideas?

I'd like to know your referral discounts and how they've worked for you - did you see an increase in business?

I give a 10% first-order discount to customers who were referred to me by an existing customer. I find that my existing customers actually encourage their friends to call me, and tell them about the 10%.

I liked the idea of a referral bonus as well. I put a quick poll on my website and one of the questions is if they (customer) would refer my company for credit on a future order. All of my answers have been yes, of course! I haven't initiated it yet, still thinking about it and all the details, but I think it's a good way to spread the word. Who doesn't like to talk about a great product and then get something in return for it!

(big sigh!) Your husband doesn't get it, does he?

I had a church minister ask me about it once. He said, "You mean if I sent you enough referrals, you'd do a $2000 reception for me for free?" I said, "sure! Because for you to earn $2000, that means you sent me $40,000 worth of business!!" (A $200 free cake means someone sent you $4000 worth of business. A $20 batch of cookies, means someone sent you $400 worth of business.)

Would I give someone $2000 for $40,000 worth of business? you bet your patooty I would! Because it isn't costing me $2000. It's only "costing" me the cost of the food and labor.

Finder's Fee, Sales Commission, whatever ...... it's a normal part of doing business. And your hubby evidently doesn't understand that part of "business".

I am a subscriber to Indy's incentive program. I have adapted the % of referral discount to my own economic area and the program has increased my busienss...more than I ever dreamed possible. Just since initiating the referral program in September of last year, NOT counting customers who found me via website...or by business card...I can credit 85 NEW customers just from referrals alone. I stay booked. It's nothing to be booked solid for several weeks ahead for me anymore. In fact, it's becoming the norm.

I don't look at it as "giving something away". You're getting so much more in return. You're being 'compensated' for a new order coming in via referral, PLUS, you're gaining additional future orders from this new person who will tell a friend, who tells another, who tells another. It totally snowballs.

When I was first advertising my business, I took free sample cakes to anyone and everyone. I'm not sure if there is a business in this county that hasn't had a free sample cake from me within the last year! Seriously!!! Now that we're out of school for the summer (I work FT at my children's school, too!), I'm taking more sample cakes. (Something there has been no time or reason to do for more than 10 months now! I just want to open up additional doors in parts of neighboring counties that I haven't yet reached.) I took two last Friday to 2 doctor's offices and booked a $150 baby shower cake ON THE SPOT at one of them! Several other orders, including another LARGE one, have already been placed. I feel that once people see and taste your cakes, it's a done deal. Seeing and tasting is believing! Your products will sell themselves.

I encourage you to at least give the referral discount a shot...maybe for 3 months to start out. If it doesn't work...no biggie... If it does, and I suspect that it will, fire up your oven(s), because you're going to be one busy baking lady!

Good luck to you!

Have a blessed day,
Amy

Once I graduate from school and have more time to focus on my lil' ol side business I'm going to do as the wonderful Indy suggested and start offering the 5% referal program. Some people are already interested in it. I think that the referal program alone would boost my business once I'm ready.

Okay - as I've said - I'm sold on the idea. Just have to do some convincing to my hubby.

I do have one situation that I'm not sure how it would work in... I have handed out my business cards to other wedding vendors - do I give them a referral discount???

I ask this because I have one lady who's been VERY helpful in getting my name out there and has given me 1 wedding, 1 bridal shower, 1 grand opening and 1 birthday. The birthday and grand opening were her own orders. The other 2 she's referred me to (her future sister-in-law) and she has another sister-in-law that's getting married this fall that she's referring me to. SO.... do I give her all these discounts?? I mean, if I give her 5% on all the referrals she's given me, she's only ordering small cakes for herself - so she'd end up getting those for free...???

This is the only thing holding me back right now. What do you think?

It's up to you, but if it were me I would start it as effective on ...(such and such) date, so you wouldn't have to go back to past orders. Honestly if I was getting lots of orders because of her and all of that 5% from previous orders added up to a free cake it wouldn't bother me. A small cake doesn't cost as much to do as a large one (unless it's a certain design--then it could)

I'm glad this topic came up -- I'm getting a lot of modification ideas to what I was doing. Thanks y'all!!

Ok I don't understand.... I think Debi needs to PM me or email me or heck call me lmfao and explain it in dummy terms lmfao

Just check out her website and it's on there too. Basically if Betty refers Mary to you and Mary mentions Betty's name while she places her cake order---Betty will recieve 5% of the total cost of Mary's order to apply to her next cake order as a Thank you for refering Mary.

Hope that didn't confuse you more--sorry

how do you issue the credit?

I'm thinking a gift certificate and since I'm at a bakery that makes tons of things, I'd make a gift certificate specific for their next cake order -- can i say it would only apply to say a cake order over $50???

I'm wondering what other deviations there are to referrals....

I love Indydebi's program. I think I will do that. I will not give anyone money or a check. I will just give them credit toward their next purchase from me.

On my Summary Form that I send to brides, I list each referral credit and apply it to their balance (I tried to cut-n-paste an example from one of my bride files .... hope it turns out ok!):

Wedding Cake Pkg........................$437.50
Food Package...............................$2450.00
Chocolate Fountains   
Child's Menu.................................$120.00
Delivery Fee.................................$75.00
Linen Discount..............................$(75.00)
Referral Credit - A. Smith..............$(150.50)
Sub - Total:..................................$2,857.00
6% Sales tax:...............................$171.42
2% F&B tax:.................................$60.15
Total:...........................................$3,088.57
        

When "A. Smith" booked their wedding with me, I figured the 5% and applied it to this brides balance. She has 2 others pending....they haven't made their final decision yet.

If she refers someone to me after her wedding, I just send her an email with the information, retaining a copy in her (electronic) file. Very informal. When she places an order down the road, she tells me she has so much credit on file and I apply it.

I saw in another link where the decorator actually lists the credits right on the front page of her website! I can't recall who it is, but it looks really cool!

(Goodies, looks like you're having lots of blonde moments today! )

I absolutley agree that a referral program works.

Think of it on terms of advertising. What better advertising can you get than word of mouth? Indy is paying really very very little for a lot of great advertising. Anytime you can 'pay' someone in retail cost numbers you've hit pay dirt!! An ad in the paper is a gamble at best, and believe me they're not shy about charging for it, and there is NO guarantee it will bring you any business.

This is advertising you pay for only after a customer orders, and then only if the original customer orders again!

I have something similar I do, but I may just tweak it a tad after I read this post.