Introduction
Referral programs are one of the most effective ways to grow your business, as they require little investment and have a high conversion rate. However, it takes work to build a referral program that converts.
That’s why we’ve gathered this list of 8 steps that will help you design your successful customer referral program:
Referral program: Overview
A marketing tactic known as a referral program rewards clients for referring new customers. Referral programs are a great way to get more customers, grow your business, and increase customer loyalty.
It works like this: you offer an incentive to your current customers if they refer new leads or clients to you. The people who receive the referral will also be rewarded with some reward or reward points when they make their first sale.
What advantages do referral programs offer??
- Attracts new customers at a meager cost:
It’s affordable for companies to invest in referral programs, and the rewards are often less than the cost of attracting new customers through traditional marketing channels.
- Referral programs have a proven track record of success:
They are popular because they’ve been shown to work well. Both parties win when a customer refers a friend or colleague who becomes a paying customer.
- Standardizes the sharing process:
Systems like Salesforce have made it easier to track all your referrals and reward those who refer others successfully.
- Brings in high-quality customers:
The best part is that referral programs don’t just attract more leads; they also help you get higher quality leads by bringing you people already familiar with your brand.
How does a referral program work?
A referral program is a marketing strategy where customers refer their friends, family, and colleagues to your business. This can be done through email, social media websites, or word of mouth.
One of the best strategies for expanding your company because it’s not just about getting new customers but getting loyal ones too. The more people who know about your company and keep coming back for more, the better you have at growing your sales.
How to create a customer referral program?
Here is some advice on how to create your customer referral program below:
Consider what your customers want out of the experience. It would help if you remembered that this is not about getting new leads; it’s about creating an experience that will make them happy and spread the word about your company.
To do this well, start by asking yourself why someone would refer someone else your way in the first place. Is it because they’re incentivized financially? Maybe they enjoy helping others out.
This will dictate how much effort goes into building each part of their journey with your brand—and whether or not those efforts are likely to pay off for you down the line.
Laying the foundations
The most robust and durable structures are built on solid foundations that can support a lot of weight. In the same way, your referral program will be much more successful if you plan carefully before launching it.
Please consider what referrals will be best for your business and how those referrals can benefit both parties involved.
Alternatively, if you sell plumbing equipment, customers prefer referring their friends through Facebook or Twitter rather than sending physical documents via snail mail.
Step 1: Choose your referral program rewards
When choosing your referral program rewards, keep the following in mind:
- Tips should be relevant to your business. If you run a pet store, don’t offer rewards like cash or gift cards—instead, provide pet supplies and accessories.
- Rewards should be easy to redeem. If it involves too much hassle for customers to save their bonus after they’ve referred someone, they’ll likely lose interest in doing so.
- Rewards should be easy to understand and explain clearly on your website or app. Make sure everything about your referral program is crystal clear, so people know exactly how things work.
Step 2: Create a referral system that works
The referral program should be engaging, with a call to action that communicates why users should refer their friends and family members. This can be done through images, copywriting, or video content.
If you have multiple pages involved in the process, ensure these are all built into one seamless experience for new and existing customers when they come back to view their referral activity later.
Step 3: Utilize referral program software tools.
You can use referral program management software to manage your program. A referral program management software will make it easy for you to create and manage your referral program.
It automatically generates links you can share with your customers, allowing them to invite friends and family through email or social media platforms like Facebook and Twitter.
Moreover, good referral program management software will allow you to register anyone who signs up through the link into your existing database, so they don’t have to enter their details again.
Step 4: Use reviews hand-in-hand with referral marketing
You can also use reviews as part of your referral program. Reviews are a great way to show customers that they are making a difference, and you can use them to drive referrals. You can use the following tactics:
Use reviews as an incentive for referrals. Reviewing products or services is one of the best ways for customers to earn rewards—and it’s also an excellent way for you to highlight the importance of being reviewed by others.
For instance, say that if someone refers another customer who then leaves a review on your website, both parties will receive 10% off their next purchase.*
Review rewards should be visible in real time so people know exactly what’s available. Show how many reviews have been left with each type of reward so that users can see how many more they need before reaching their goal.*
Six best referral program examples to inspire your own
To help you get started, here are six examples of referral programs that have done it right:
1. Morning Brew
Morning Brew is a coffee subscription company that allows you to get freshly roasted, specialty-grade coffees delivered on your schedule. It’s a great way to try new coffees without the commitment of buying an entire bag.
The referral program for Morning Brew is simple: refer friends and family, and you’ll receive 10% off any purchase from their first order. If your friend or family member makes their first purchase using your code, you’ll also receive 20% off of their order.
2. Harry’s Shave Club
Harry’s Shave Club is an excellent example of a company that has built a successful referral program. Harry’s has a straightforward referral program that rewards both the referrer and the referee.
For the referee, they receive $5 off their first order when they sign up using your unique link. As their referrer, you get $5 off your next purchase when they make one as well.
3. GetResponse
GetResponse is a powerful email marketing software that allows you to create, send, and track emails. It also has a referral program that lets you earn up to $600 in free advertising credits.
If you use this link, then you will earn $10 per month for every active subscriber listed on their account.
GetResponse also offers a 30-day free trial with no strings attached, so even if it doesn’t work out for whatever reason, there’s no harm done!
4. Grasshopper
Have you ever needed a virtual phone system for your small business but needed more money to buy it?
Do you know anyone trying to find a new home? Ome service provider who could use some help finding the right one? If so, Grasshopper may be just what you’re looking for.
Grasshopper is an easy-to-use virtual phone system that can save small businesses thousands of dollars annually. Customers must reach out through their website or mobile app using their 10-digit phone number.
By replacing cumbersome landline systems with affordable communication tools like video conferencing, voice mail, toll-free numbers, and more. The best part: It’s free to try.
If they like what they see during their trial period, they can sign up at any time with no contracts or hidden fees required – making this deal something everyone should jump on.
5. Omsom
Jomsom is a digital agency that helps brands grow their business through referral marketing.
The company’s referral program is an excellent example of an effective referral program: it has all the features required for success, including personalization, gamification, and social sharing.
Once you have your base, you can add additional features to improve your program.
6. Stitch Fix
An online personal styling service Stitch Fix, helps you build a wardrobe of curated fashion items. You can use it to shop for clothes and accessories like handbags, jewelry, and shoes.
The company sends out a box with five items based on your preferences. You get to try on clothes in the comfort of your home and send back anything you don’t want!
Stitch Fix has grown its business by launching a referral program where existing customers refer new ones through special links they receive via email after signing up for the service.
As this startup grows its customer base, we’ll likely see more companies follow suit when launching their referral programs!
Conclusion
Referral programs are a great way to drive more word-of-mouth marketing.
Creating a program that incentivizes customers to share your name and products can increase traffic and sales while deepening customer relationships.