Have you heard of the Marketing Referral Program? Marketing Referral, according to Wikipedia, is the method of promoting products or services to new customers through referrals, common word of mouth. On the other hand, references are the act of instructing a person to a place, or person for information, help, or action, usually to a person or group who has more knowledge and experience towards something. Also, as mentioned above, word of mouth plays a vital role in Marketing Referral. How is that so?
Word of mouth builds your company’s brand and aids in creating a positive image of your products and services. People tend to believe other people’s testimony regarding a product or service they have consumed or experienced, which encourages their friends or families to buy that good or experience that company’s services. Always remember, a happy and satisfied client brings you more clients.
Because of this, Marketing Referral causes a significant impact on the sales of companies worldwide since technology has made it easier for people to communicate with one another, and share thoughts with others.
You might also be wondering why you need a marketing referral program. Let us take a look at some reasons why:
Reasons why your company needs a Marketing Referral Program:
1. According to Mark Zuckerberg, the founder of Facebook, “People influence people.” As we have talked about a while ago, word of mouth plays a vital role in a company’s marketing side.
2. Referrals are an indication of the company’s excellent performance. It is easy for people to recommend a company which offers quality products or satisfactory services than support one with a substandard product and poor service.
3. There will also be an increase in the engagement of the clients. What do we mean by that? Clients will more likely visit your websites and online accounts for referral discounts and awards on your company’s products and services.
4. Satisfied clients gained from the referral program bring repeatable purchases. Of course, once satisfied, clients will again use word of mouth and share their experiences, which will bring more sales to the company.
5. Social media also supports marketing referral programs, since according to the Data Report, there are 3.484 billion social media users worldwide in 2019, which is around 45% of internet users all around the world. Through social media, you can reach people across the globe.
6. You will have a good Return-on-Investment value. Marketing Referrals are cost-saving strategies that eliminate traditional marketing strategies that are usually expensive and bland.
So tell me, is the Marketing Referral Program already in your company’s bucket list? If yes, the next thing you are probably thinking of is the best practices of a successful marketing referral program. Yes, we will be talking about the best practices and the successful marketing referral programs as well.
Before we proceed to the best practices that will take your marketing referral programs to the next level, let us first discuss some successful marketing referral programs that may be effective and useful in your company.
Successful Marketing Referral Programs:
1. Dropbox – Dropbox is known for giving away 500MB of additional free storage space, up to 16GB for customers and referrals. The number of Dropbox sign-ups increased by 60%, with 4 million new users in 15 months, which brings a total of over 500 million users.
2. Paypal – Paypal has this “Refer-a-friend” program, which awards free cash to its users and friends. In just two years after its launch, Paypal acquired over 100 million users due to this referral program.
3. Uber – Uber solved the problem of looking for cheap yet convenient transportation for millions of people worldwide by launching a referral program, allowing users to give their friends discounts on their first rides. And here’s another good thing about Uber – they do not offer awards or bonuses only to their users but also to their drivers!
4. Google – Google, one of the most popular websites, which according to Wikipedia, specializes in Internet-related services and products, which include online advertising technologies, a search engine, cloud computing, software, and hardware. It offers a referral program that gives its users $20 for every successful subscribes to Google Apps.
These Marketing Referral Programs probably inspired you to develop your own. But, the nonstop question “How?” comes in mind, for sure. Let us take a look at the steps on how you may create your referral program:
How do you create a referral program of your own?
To acquire newcomers in your company – clients and customers, to be specific, you must first concentrate on the existing happy and satisfied clients. It takes a lot of brainstorming to set up a referral program that works and that your customers will talk about to their friends and families. Here are some tips on how you create one:
1. Make sure to have a clear vision. What are your goals? What are you trying to gain from your referral program? Do you want a more significant number of clients and customers, or want an increase in sales? Sometimes, different goals need different strategies, so make sure that your goals are clear enough for you to make your planned strategies work.
2. Take note of your current customers’ referral references. Your customers’ referral sources are your customers, their friends, and their families, who are happy and satisfied with what you offer. Make a record of these people, and how you may reach them in the future.
3. Make a plan to reach these sources. You may e-mail them, call them, or text them regarding your referral program, awards, and bonuses. These sources are your primary target for making a referral program, so make sure that your planned program fits them.
4. Establish the referral incentives that you are going to offer. There are different referral incentives to offer, but what are you going to come up with to be unique and easily noticed by your customers? There are cash incentives, discount incentives, freebies, etc. Every customer suits a particular type of stimulus, so make sure to plan wisely.
5. Tell your customers and clients regarding your referral program. Once your plan is all set, it is time for the world to know your brand and your awaiting awards! Let word of mouth do its job by allowing your customers to tell others about your developed referral program. Research the most effective way to broadcast the program to grow your list.
6. Don’t forget to track referrals and rewards. To know whether your referral program is successful, you must monitor your referrals and the rewards to make sure it is working out well. You must create or keep a list of who referred whom, follow up both the referrer and the referee.
We have already talked about the successful marketing referral programs, and how to create one. So let us now proceed with the five best practices for a successful marketing referral program that will put your business to the top.
Five Best Practices for a Successful Marketing Referral Program:
1. Your Marketing Referral Program must be accessible. It must be easy to discover. Make sure that your program is reachable by customers from various age groups, lifestyles, etc. Do not let your customers waste time in finding a referral link, or accessing your referral program. Ensure that they won’t stay online for long hours, searching in their e-mails if they got a newsletter from you or access their points or rewards through your website. If people would see your referral program, then they would have signed up or invite others to buy your products, or try your services. Put in mind that the goal of your plan is to let the people know your company or business, your products, or your services, so you will build your brand and get a higher sales as well. If people find it challenging to sign up, it might also be difficult for them to spread the word.
2. Make sure to have integrity in all you do. Honesty, transparency, and integrity attract customers. Be honest with your customers and clients with the whole process of your referral program. Your customers and clients might find sharing their information a bit scary, so make sure to let them know how you will keep that information as private. Also, share all the information and details about the program to your customers and clients as broad as possible. Through this, there will be a higher possibility for them to put their trust in your company. Also, it may encourage them to sign up. By knowing some of their information, you will have the opportunity to understand customer behavior and preferences. The more you know them, the more you may develop new and effective marketing strategies to acquire more customers, and gain higher sales. Make sure you have planned the data collection very well before you begin your program.
3. The tastes and preferences of your customer’s matter. Make sure you know it. Your customers are like blood. They are necessary for other for the body to survive, and your company is the body. For your company to survive, you need your customers who buy your products or experience your services. Make sure to know them very well to develop an effective program that will give them something of value. Identify the reason why your customers come to you. What are the things that push them to patronize your products and services? After careful observation and study, you may know what program to offer to your customers – a program that they will find interesting.
4. Know when to launch your referral program. You cannot stay at the doors of your office or business establishment and ask for a referral to people who come by. You cannot make a call and tell a customer regarding your program without a proper introduction or approach. You have to wait for the perfect timing because if you rush things, you might lose the sale and the customer. You sure do not want that, right? It is essential to know whether your program will work by conducting a careful observation of your prospects. One perfect timing is during a “shopper’s high.” It is when customers are so into your company’s products or services. It is an ideal time since the rush of the purchase is present. Another perfect timing is when you find customers highly satisfied with the products or services that you are offering. Sometimes, there are other ways to gain referrals like free delivery, giving discounts, or doubling reward points to repeated customers. Through this, they may spread the word, and the company may gain referrals.
5. Invest. A good referral program needs support. Your time and resources might be good because, without these two, there is a possibility it will not work. Do not belittle the power of the referral program by not putting the right amount of time and resources into it. Time and resources indicate a commitment of the company to its plan.
Implementing the practices listed above in your referral marketing strategy may improve customer involvement in the company, and may also increase sales.
Are you now ready to develop one effective and efficient marketing referral program? It is an excellent step to take for your company to step up. Remember, people can influence people – as satisfied customers influence others to buy products or experience services the way they experienced and bought it. Be inspired by the successful marketing referral program listed above by some famous companies across the globe. Follow the steps on creating your good referral program and coordinate it with your company’s vision. Lastly, do not forget to follow the five best practices for a successful marketing referral program.
Referral marketing can easily be done with referral software. It can be a Shopify affiliate plugin and can be used by new sites like Best Drums Set Labs. It has so many benefits and it can stop shopping cart abandonment.
“Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the holy grail of advertising.” – MARK ZUCKERBERG, CEO Facebook.