The following is a guest post by Tiffany Rowe. Tiffany is a Marketing Administrator at Seek Visibility, where she assists clients in contributing resourceful content throughout the web.
Referral marketing is one of the most powerful tools that a startup has in its arsenal to capture new customers while also keeping existing customers engaged. Not only does a referral program expose new potential customers to your business, but the trust factor that comes from hearing about it from a known source can spur more action than advertising or other forms of marketing.
Setting up a referral program is relatively easy: Really, all you need to do is ask your customers to tell others about your business. However, for a truly successful program, a bit more thought and effort is required. As you plan your program, keep the following in mind to get amazing results.
1. Make It Easy to Make Referrals
If your customers have to jump through hoops to make a referral, they probably aren’t going to do it. Make it simple for people make a referral. Some brands set up a “referral hub” where customers can log in and access all the tools they need to make referrals and keep track of what they’ve already done. Others use simple buttons that will connect customers to their social accounts, where they can instantly share the offer or tailor the invitation to specific individuals. In any case, do most of the work for them, so they can make the referral in just a few clicks.
2. Offer Benefits to Both Parties
While some people are willing to share their favorite products and companies because they honestly believe in them, most people want to know “what’s in it for me?” when you ask them to make a referral. Your referral marketing program, then, should offer something to both the person making the referral and the person receiving it. For instance, offer referrers a cash bonus or credit for every referral who signs up — and that person gets a bonus as well. When the offer is mutually beneficial, everyone wins.
3. Make the Reward Meaningful
Understanding your audience, and what motivates them, is key to a successful program. Not everyone is driven by the same type of reward — some want discounts or free product, while others want cash, or some type of VIP treatment. Offering several different reward options, or a multilevel approach to incentives, creates a more meaningful program and better results.
4. Include a Clear Call-to-Action
The most successful referral marketing programs are those that clearly ask for a referral. Check out some of your favorite websites. Many are likely to have some type of referral option, with language like “Refer a friend, get $20” or something along those lines. Make it very clear what you are asking for, and why customers should help you out.
5. Gamify Your Referral Program
Gamification is one of the best ways to build engagement, whether it’s an app or a referral program. Humans are by nature competitive, and creating a program that lets them “win” by completing referrals can improve your results. Use referral program software to create dashboards, progress bars, and even points-based programs (in which customers earn points for rewards by completing activities) that turn the process into a game and keep people interested.
6. Build up to Asking for Referrals
People are unlikely to refer you to others before they have had any experience with you. Therefore, you need to build up to the “ask,” and establish a relationship before you request referrals. In other words, don’t rely on a popup that appears the first time someone visits your site to get referrals. Subtly include references to your program throughout your site, and make the request after the customer has had an experience with you.
7. Target ‘Happy Moments’
Speaking of customer experiences, the best time to ask for a referral is after “happy moments.” Did they just make a purchase? Download a resource? Watch a tutorial? Asking for referrals when customers have good feelings about your product or service is likely to generate far more positive results than asking at random moments.
8. Define ‘Referral’
Finally, be sure that your program clearly defines what constitutes an actual referral. Does the referral need to sign up for something? Make a purchase? Or is providing a name and email enough to get a reward? Be clear, to avoid confusion and disappointment.
You will most likely have to refine and adjust your referral program as you go, and discover what works and what doesn’t. When you do, though, the benefits to your business can be substantial, and help you build a solid, happy customer base.