Word of mouth is one of the best types of marketing for a tutor. That’s when your current student tells her friends how awesome you are at tutoring and then they decide to hire you as well. Word of mouth is ideal because your clients, past and present, will tell people about you whenever they get the chance so long as you do good work as a tutor.
You can’t force your customers to spread the word, but you can encourage them to! That’s where starting a referral program comes in.
What can you offer as a reward?
Be creative with the gifts you give. Perhaps it could be a gift card, or a gift basket, whatever you think your client would appreciate. Make sure the gift doesn’t cost more than $200 after tax because you can deduct the gift as a business gift expense on your taxes. Consult your tax adviser and always save your receipts!
How to choose the referral fee?
If you charge $30 per hour for tutoring, you can afford a better gift for referrals than a tutor who charges $10 per hour. If a new client will schedule an average of 4 one hour long sessions a week for 2 months, that new client is worth 32 hours of tutoring. Multiply that by your hourly rate and you will learn the approximate value of each new client you get. Here’s the formula:
Client Value = [(average hours per week) * (average total weeks tutoring) * (your hourly rate)] – (expenses)
Expenses are whatever it costs you to tutor, such as gas to get to the tutoring location, books, tutoring resource costs, stationery, writing utensils, etc. If you’re on the lower end of the hourly rate spectrum, consider offering a cheaper reward for referrals, such as movie tickets or something. On the higher end, you can get more lucrative and creative with it.
How to make your referral program work?
Make sure you let your clients, past and present, about your referral program! If they don’t know it exists, you won’t benefit from having one, so get the word out there! I used to have the details for my referral program on the back of my business cards and then I’d give clients extra cards to pass on to their referrals. However you decide to do it, good luck!