Like most small companies, rural broadband providers probably have a small marketing budget. Of course, all marketers wish they had a larger budget, but smaller companies often don’t even have a “marketer” and must make due with less money and more innovation in their marketing efforts.

The good news is there is a simple way to boost your subscriber base for very little cost. If you are not already taking advantage of this tactic, you should start right after reading this article. I’m speaking of a customer referral program. If you don’t have a referral program in place, you are missing out on a simple, inexpensive way to grow your business.

Why are referrals so powerful? Referrals come from a credible third-party with first-hand experience doing business with you. They command special attention because they usually come from a friend, who (hopefully) doesn’t have ulterior motives and who has the best interests of their friends in mind. A referral program can help turn customers into evangelists, since customers that give referrals tend to become more loyal to your business. Finally, a referral program is low cost, and quickly boosts the impact of word-of-mouth marketing.

Customer Service is Key

Good customer service is the foundation of a successful referral system. Again, people want to do right by their friends. If a customer is not satisfied with your service, they’re not likely to suggest to their friends that they give you a try. Quite the opposite. But, even if you provide excellent customer service, that doesn’t mean that you’ll get a lot of referrals. Some assume that referrals will happen by themselves if they serve their customers well. This isn’t true. If you’re not deliberate and proactive in creating referrals, the number of referrals you receive will be far fewer than if you have a referral program in place.You need a to leverage your good reputation and the quality service that you provide.

Here are some key features in a successful a referral program:

Compensate

First, you need an incentive to entice existing customers to refer your service. You’re not buying a referral, but you are giving your customers a good reason to think about friends and associates that might also benefit from your service. For example, a common incentive is to provide a free month of service to the existing customer for each new customer they bring in. This will make it more likely that your current customer will spread your good name.

Promote

Promoting your new customer referral program is easy and inexpensive. First, you should broadcast an email with an initial announcement about the program, and follow up with quarterly reminders. In addition, you can add details about the referral program in a “welcome email” if you send one to your customers. If you are already active in Social Media, a Facebook Fan page or Twitter account are perfect tools to promote a referral program, since a referral by nature is a social activity. Of course, you should also post the details about the referral program prominently on your Web site. Finally, if you can print a note on your bill about the program or include a bill insert, this will also help get the word out.

Track

When a new customer joins your service, they will simply give your service rep the name of the person that referred them, and some other identifier such as email address or account number. You will give the person that referred them a credit for a free month of Internet service or some other compensation of your choice. I recommend stipulating in your program that a referral is only qualified once the new subscriber has been a paying customer for at least one month. This helps ensure that you are not losing money on the deal, or being taken advantage of.

Set up a system internally to record the referrals as they come in each month. This could be as simple as a spreadsheet listing the new customer, the customer who referred them, and the date. Keep track of each month separately, and once you verify that the new customers on your report or spreadsheet have paid for their first month of service, pay out the referral fee or credit to the existing customers. Repeat that procedure each month. Yes, it’s a little extra work, but remember that this program is gaining you new subscribers. Also, those new subscribers are already aware of the referral program, and hopefully will be more likely to refer others.

Mix it up

Stir the pot occasionally to keep things fresh. You might advertise for a month that both the new customer and the customer who referred them will get a free month of service. Or, you can try paying cash, or offer a promotional giveaway of some kind, such as a gift certificate to a local restaurant. You should be able to negotiate a discount since your promotion is helping spread their name.

Let me know if you think this will work for your company, and if you have any other ideas. Or, if you already have a referral program, how has it worked for you?