While lots of businesses focus on other sorts of marketing, word of mouth can’t be discounted. It’s a powerful tool for a company in any industry. As new technology builds and additional platforms come alive, businesses can now leverage word of mouth marketing through referral programs. Even if you already have one set up, you likely appreciate knowing how to make it even better. That’s what we’re going to be focusing on today.
Choose the Right Rewards and Discounts for Your Audience
When you’re offering a reward to customers who refer others, incentives can be a huge help. The only issue is choosing between discounts or money. The answer isn’t as simple as one being better than the other on all occasions. It all depends on your customers and what their needs are.
Do customers tend to make many purchases? If so, a discount could convince them to make larger purchases. On the other hand, those who don’t make frequent purchases might appreciate a cash reward more. This can get them to show interest in your customer referral program.
There are also situations where companies take preorders but offer discounts on them. This can be an excellent way to get leads into the program that might bring in additional customers. Whatever you decide to go with, make sure it’s right for your customers.
Make Referrals Simple to Do
This one might seem like common sense, but it’s worth spending a moment on. Your current customers will be much more likely to refer people to your brand if you make the process easy. Nobody wants to spend extra time providing referrals, so you need a streamlined process that takes as little time as possible out of someone’s life.
The top way to do this is by making sure your referral program has several sharing methods. Social media marketing activities and emails are the two most common options for bringing in referrals. However, you also want to be sure that you have some way to track the offline referrals that occur. This ensures that all your customers have an incentive to bring you additional business.
Choose the Right Discount Amount
When it comes to discounts, you can choose between a flat amount or a percentage. There’s a lot of debate about which of these options works best, but it really comes down to what service and products you provided. If most of the things you are discounting are quite expensive, a flat discount will sound more exciting than a percentage.
However, the opposite applies when you’re selling less expensive options. For instance, if you’re selling a t-shirt for $30, a 20% discount is going to look more appealing than a straight $6 off. It’s the same amount regardless, but 20% seems like a much larger number to most customers.
Ask for Referrals at the Right Moment
Knowing how to ask for a referral is important and nobody denies that. However, it’s also just as important to ask at the appropriate time. In most cases, customers are most likely to become your referral program members right after they’ve purchased something. It puts people in a positive space to buy something new, making them more likely to refer their friends to your business.
In truth, this isn’t as surprising as it might seem. If you have an excellent funnel that makes a customer out of a site visitor, the new customer is going to be in the right mindset to go farther by sharing your business with family and friends. Consider adding a call-to-action for your program on the thank you page and the email receipt for the best results.
Reward Both Referrers and Those They Refer
You want to reward your customers that refer other people to your business, of course. However, it’s also important to offer rewards and incentives to the people who are referred to you for goods and services. For example, you could choose to send out a discount coupon to both the person who referred a friend and the new potential customer.
There’s a second reason that this is such a good idea. Sometimes people are nervous and ashamed of sending referral codes out to friends. However, if both parties are getting something out of the situation, it’s more exciting to share that information with a friend. It also makes it more likely that the referred person will become a customer and might refer others down the line.
Pay Attention to Data and Analytics
The people who are part of your referral program are those who you want to keep motivated to refer additional people. One of the best ways to ensure this happens is by offering information showing how well they’ve done over the last year or six months. Having a referral dashboard that customers can visit to track their milestones can assist with this.
Not sure what kind of metrics you should post for customers to see? Consider showing how many people have signed up based on their referrals, how many referral emails they have sent out in total, and how much of a discount or a cash value they have earned by participating in the program.
Start Things Off Soft
You don’t have to start out rushing to get signups for your referral program. Sometimes going slowly is the better option. Consider sending out a questionnaire with essential questions. Ask how the customer feels about their experience with your company and whether they would be interested in referring you to their friends in the future.
After a customer has decided they enjoy your brand and what you bring to the table, that’s a great moment to share a referral form. At that point, customers can enter an email address for their friends. It’s as simple as that to make their first of what might later be many referrals.
Having a referral program is a great way to use word of mouth to bring in leads for your company. Use a few of the tips above to ensure your program offers what customers want to see. You might be surprised by how much of a difference it can make!
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