HypeSprout Review- The Smartest Way To Leverage On The Power Referral Marketing
In many businesses, referrals are viewed as an organic byproduct of the company successfully doing its job. If you exceed customer expectations, it’s natural to assume they’ll return the favor by singing your praises to their networks. If you blow them away with world-class customer service, you can expect a flood of social-media goodwill.
But here’s the problem with those assumptions: While referrals do happen organically, they’re never a given -- even if a customer loves your products and services. In fact, a Texas Tech University study found that while 83 percent of customers say they’re willing to provide referrals after a positive brand experience, only 29 percent actually do. That chasm exists for many reasons, but it’s often exacerbated by a failure to properly prioritize and manage a referral program.
So, how can your company close that gap? Here’s a list of referral marketing “dos” and “don’ts” that will help you proactively convert happy customers into reliable revenue-drivers:
1. Do give customers the tools they need to promote your company.
For referral marketing to work, you can’t expect customers to invest time and energy into developing tools and assets to support your brand. Instead, you need to make the referral process as simple as possible. This might mean creating a hashtag that customers can share on Twitter, or developing email templates that ensure ambassadors use the right language and share the right landing page URL.
Regardless, decreasing the effort required to deliver a referral is a critical piece of the referral-marketing equation.
2. Don't expect customers to always be thinking about you.
One of the biggest mistakes companies make with referral marketing is assuming customers always have their brands on the top of their minds. If you’re not constantly looking for opportunities to engage your most loyal customers, then you’re missing a huge opportunity to encourage and incentivize conversations about your products or services.
3. Do think about who (and how) you ask for referrals.
To operate a successful referral marketing program, you must consider who you’re targeting, where those people are most active, and which incentives are most likely to influence specific actions. Early adopters love being the first to discover or experience a new product. Others are driven by monetary gain, such as a $200 credit on their bill or a percentage of the sale.
Regardless of where your customers fall on that spectrum, it’s critical to truly understand their motivations and preferences before you reach out. If you offer the wrong incentive to the wrong customer in the wrong environment, your referral marketing program will fail to generate results.
4. Don't “set it and forget it.”
Once you get a referral marketing program up and running, it’s easy to fall into the trap of assuming the engine will run itself. Like all strategic marketing initiatives, referral-marketing programs thrive in an environment of perpetual optimization.
This is where referral marketing software can be enormously helpful. With the right tools, you can create a structured process around monitoring, tracking, testing and incentivizing referrals. Why is this valuable? Over time, the analytics created by that process will provide clear trends into the activities, channels and customer personas that are driving the best results. Arming yourself with that insight will make it much easier to successfully scale your referral marketing program.
5. Do incorporate referrals into your overall marketing strategy.
The best referral-marketing programs (see Airbnb and Dropbox) share a common thread: referrals are embedded into every aspect of the user experience. Referral calls to action are included in newsletters and blogs. Employee email signatures feature referral messaging. And the referral program is fully integrated with other critical systems (customer-relationship management, marketing automation, ecommerce technology, point-of-sale systems, optimization tools, etc.).
For referrals to consistently deliver bottom-line results, they must be part of how your business operates. Without structure and commitment, you’re largely at the mercy of chance. But with the right approach, process and technology, you can turn referrals into a predictable, scalable channel of high-quality revenue.
What is a referral program?
A referral program is a deliberate, systematic way of getting people to make referrals to your business.
A referral program, then, is a way of purposefully encouraging referrals. This helps you get some of the best new customers you can get. It also increases the customer loyalty of your existing customers, by having them invest more in your brand. Modern referral programs use software to detect referrals, keep track of them, and to pay out referral rewards.
(NOTE: If you’d like to set up your own referral program, you can check out ReferralCandy. ReferralCandy makes it easy for any ecommerce store to have their own referral programs.)
What are the best referral programs?
PayPal. They literally gave away free money, and it worked out great for them. And this was before social media!
Dropbox. Modelled after PayPal, Dropbox’s referral program got 4 million users in 15 months
Airbnb. A single user in China led to thousands of signups and hundreds of bookings in a single month.
Uber. They’ve been in a unique position to run multiple referral programs at once – for users and for drivers.
Tesla – $1,000 for both advocate and friend, with quite a start-studded list of advocates!
Amazon Prime –Likely one of the most heavily-used referral programs in recent times.
Google – When the front page of the Internet decides to run a referral program, it’s worth looking into.
Evernote. Their referral program relies on a point system.
Thinking of putting together a customer referral program, and need some ideas or inspiration? Here’s a list of 74 referral program examples for businesses of all types.
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Referrals helped PayPal achieve 7 to 10% daily growth, catapulting their user base to over 100 million members.
According to David Sacks, original COO of Paypal, Paypal used to literally pay people to invite their friends.
It turned out to yield better marketing ROI than traditional marketing channels.
Once they achieved a critical mass of early adopters they dropped the Refer-A-Friend bonus, but they kept it for Merchants. Then they dropped the Merchant bonus, once they reached their target numbers.
Amuze is a members-only fashion portal that gives discounts on authentic designer labels. $25 may not seem like a hoot, considering that Amuze is selling luxury items. However, Amuze’s flash sales and daily discounts allow the $25 to have a much better impact. Their insane discounts are part of their selling point, and their referral program helps to drive the prices down further, gaining more customers in the process.
The Clymb sells sporting and adventure gear. Interestingly, they’ve changed their referral reward structure– initially it was $15 credit for a minimum purchase of $50. At the time of writing, it’s now $10 credit, but for a minimum purchase of $50.
They now even allow you to mass invite your friends and send them a personalized message.
Erin Condren sells clutches, t-shirts, notebooks, papers, stickers and all sorts of fashionable accessories. Her referral program works because it’s heavily focused on giving her customers a great experience.
True&Co is an online lingerie store that uses a special algorithm to figure out a lady’s bra size, and then recommend lingerie that cater to their personal sizes. They even provide a home-fitting service, so that totally eliminates the trip to the dressing room.
Look at this:
Our resident referrer, Alice, only has to give her email address before she can refer her friend, Brenda (She’s not referring Bob this time, for obvious reasons). She can then share by entering her friends’ email addresses, sending a personalised link, or through Facebook.