When it comes to making the most important decision of all — who to trust with your child while you are away during the day — nothing works better than a referral from a trusted friend or family member.
No matter how friendly your staff is, how amazing your online reviews are, how many community events you’ve attended or how fancy advertisements you’ve created, they don’t come anywhere close to the effectiveness of a personal recommendation.
Not only are referral programs the most surefire way to boost enrollment, but they can also the cheapest. Despite this, many preschools overlook this low hanging fruit to boost their enrollment, placing little attention on their referral program — and sometimes not even having one at all!
In this article, we’ll show you how to create your very own parent referral program that will help your happy customers do the selling for you!
What is a Parent Referral Program?
A referral program is an incentive that a childcare provider offers to parents with children currently enrolled in its services in exchange for a new customer resulting from that parent’s recommendation.
Although great service will typically result in recommendations naturally, referral programs are introduced to improve the likelihood of a parent making a recommendation that follows through. Telling parents about a referral program puts referrals top of mind when they may not have otherwise considered it, and gives them that extra little push to convince those in their network to consider your services.
Referral programs also improve the quality of applicants to your center. A parent’s reputation is on the line when they are making a referral, and so they will be more likely to recommend people who they think will be great customers and fit in well with the community at your center.
Setting a Budget
Referral program budgets can vary from expensive to free rewards, so it is all of a matter of finding what works the best for your business.
A good place to start is by thinking of your referral program as another customer acquisition channel, just like a newspaper ad, flyers, direct mail, search engine marketing, and so on. If you have a set cost of acquisition, then factor this into your referral program budget. For example, if it costs you an average of $100 in advertising to bring in a new customer, then that may make a good budget for your referral bonuses as well since it is serving the same purpose.
Choosing a Great Reward
Parents are usually willing to vouch for you if they enjoy your services, but having a great reward will help incentivize them to go that extra mile to get the word out.
The better you understand your customers, the easier it will be to think of a reward that really resonates with them. Here are some examples of referral rewards that are great for childcare providers:
- Money (cash or cheque)
- Gift certificate (cleaning services, restaurant, Amazon, etc.)
- Discount on your services
- A physical gift (e.g. a stand mixer)
- Tickets to an event
- Donation to a charity
More often than not, the reward will either be money or a discount on your services — and let’s face it, new parents could always use a break when it comes to finances.
Ensuring Authentic Referrals
There is such a thing as having too good of a reward. For example, if parents get $100 for every person they bring in the door to get a tour of your facilities, then you will likely get a big increase in tours, but this might be to collect the bonus with no intention of actually registering.
To counteract this, set criteria that ensures you will only be receiving real referrals from people who are seriously interested in enrolling at your center. For example, some rewards are only handed out once the referral is officially signed up, while others may wait until after the new customer has been signed up for a few weeks or months.
Getting the Word Out
In order for your referral program to be successful, people will first need to know that it exists! To make sure your customers take advantage of the program, it is important to do everything you can to notify — and remind — them to send in their referrals.
Here are some ways to promote your parent referral program:
- Provide a handout for new customers.
- Include a section in your parent handbook.
- Mention it in your email signature.
- Include a mention in your newsletter (and reminder) every time a parent has made a successful referral.
- Send a reminder once per semester.
- Post a sign at your location.
- Remind parents in conversation when they mention a friend with a young child.
- Mention the program in your daily sheets.
How to Document the Referral
Once you’ve finally gotten a referral, make sure your (and your customer’s) hard work doesn’t slip through the cracks! It is important to properly take note of the referral so you will remember that it was made, as well as to send out the reward.
There are full-fledged referral software solutions on the market, but if you’re just looking for something basic, here are some ways for you to document a referral:
- Have the referring parent send an email to notify you about their referral along with their contact information.
- Create a form for referring parents to fill out (like this example).
- Include a section in your application form for potential customers to note if someone has referred them.
And finally, make sure you don’t forget to send the reward once all of the criteria has been met! Some options include:
- Create a spreadsheet to track all referral information, including the date when a reward should be sent.
- Set a calendar reminder for yourself to send a reward.
- Have a “referral day” blocked off in your calendar each month, where you send out all rewards (if any) and send out a reminder about your program to collect more referrals.
Have you had any success with a referral program at your childcare center? Share what’s worked (and what hasn’t) in the comments!