Are you relying on word-of-mouth to grow your business?
You might think that if you exceed customer expectations, they’ll return the favor by singing your praises to their friends—but unfortunately, it doesn’t usually work that way in reality.
In fact, according to a study, while 83 percent of customers say they're willing to provide referrals after a positive experience, only 29 percent actually do.
That means if you're not effectively using referral marketing, you're missing a huge opportunity to attract more customers.
I'll show you five tips that will help you build a successful customer referral program to provide you with a steady stream of customers.
1. Pick rewards that matter
Before you set up your program, you need to understand what motivates your users to send a referral, and then design your program to provide rewards addressing their motivation.
Keep in mind that only appealing offers drive shares, so make sure to select rewards that are compelling enough to your best customers.
A double sided reward structure helps motivate users who are not looking to profit off of their personal network. As it delivers benefits to both your existing and new customers, they’re more effective than single-sided rewards.
2. Create a referral program page
It’s vital that your existing customers, as well as the potential customers they refer, know the benefits of your referral program.
The best way to let your customers know about your program is by creating a page specifically for the referral program. In this page, you can clearly explain the benefits of joining the program.
3. Create customer awareness of the program
You can't get referrals from people who don't know about your referral program. Make sure you’re putting forth the effort to promote your program so all your customers know it exists.
Here are a few ways:
- Feature on your website: Feature your referral program page prominently on your website and marketing channels. Make it visible in your main navigational menu, so it gets the attention it deserves.
- Capitalize on “happy moments”: In referral programs, a happy moment is when a user is most likely to give you a referral due to a recent good experience while using your product or service. This could be directly after a purchase, or after they leave a good review. You can capitalize on this moment by offering an easy way to share the positive feeling as a referral. An easy way to do this is by creating a pop-up or slide-in that only appears on order confirmations with page level targeting.
- Invite your customers: You can directly invite your existing customers to your referral program by emailing your list. They are the best source of initial referrals because they’re already loyal users of your products or services.
4. Make it easy for your existing customers to refer
Referral programs should be convenient. If a customer has to jump through hoops just to refer a friend, it's very likely that they’ll give up on referring.
Make sure you’re making it as easy as possible to share your products and refer your brand, by placing sharing buttons in prominent places. According to Friend Buy, product page sharing brings in 51 percent of referral revenue for companies who have social sharing buttons on those pages.
If you're not promoting your referral program directly on your product page, you can still place social sharing buttons to make it convenient for customers to share the products they love with their friends.
5. Set up an affiliate program
Setting up an affiliate program is another great strategy to promote your business through word of mouth advertising. In affiliate marketing, you pay a commission to a person who refers a new customer to you.
To set up an affiliate program for your product, you can join a network like ShareASale or ImpactRadius. Joining a network is more beneficial than setting up a self-hosted affiliate program because they already have a large number of affiliate marketers in their database who’re looking to promote products to their existing audience.
Creating a referral program is a low budget high-impact marketing strategy for your business. All businesses should use it, no matter how big or small.