What can a good referral do for you?
It’s every business owners wish that all of their customers are out singing their praises and telling everyone they meet go check out their business! Referral marketing has become so successful in growing huge companies, that when it comes to referrals, you need to do more than simply sit back and hope your customers are spreading the word, you need to ask them to.Not a fan of asking for help? Check out this video and see what Steve Jobs has to say about it. The act of not asking, could be a huge missed opportunity. One good referral could turn into multiple new customers and before you know it, you could be growing your business faster than you could have ever imagined.
In a case study done on the company Dropbox, it was found that Dropbox rose to a billion dollar company by using what they call “growth hacks.” These are techniques that are used to bring customers in, as opposed to having to buy them through marketing dollars. These “growth hacks” cost Dropbox little to nothing to implement, but provide insurmountable results. Dropbox associates it’s refer-a-friend program to an increase of 60% of new signups. Providing an incentive to a customer for referring a friend is the shiny red apple in front of their face. Also, making the referral process as easy as possible will make the customer stop and say, “Why not!” Dropbox makes it as easy as filling out a quick form. The incentive: extra storage. Something that is valuable to the customer, but won’t cost the company an arm and a leg.
As you can see, finding a way to get referrals, is clearly something that needs to be considered. So now, how can you do this for your company? It only takes 4 simple steps!
1.Build up your community
Fill in the gaps of existing clients.
Chances are, you have a healthy list of customers in your toolbox to utilize for referrals. But before you decide on running, let’s say, an email campaign, you need to do your homework and make sure you have all of your customer’s emails. While you’re at it, double check for phone numbers and addresses as well. If you need assistance organizing and keeping track of your client information, check out the Top Ten CRM Systems that could do your company a world of good!
From the information that you collected, you can then decide on the most effective type of campaign to run. The most commonly used and most successful are email, social media, direct mail, and cold calling. Some other things to consider are time and budget. You want to figure out how long this campaign will be in effect and also, how much you are willing to put into it. Then comes the fun part. Figuring out what you can offer your customers as an incentive.
2. Make the Incentive Relatable to your Customers
More value for them at less cost for you
Refer a friend and you will have a chance to win $1,000,000. Not likely. When creating an incentive for your customers, be creative. Really get down to the core of your clients and see what they would find valuable. In the Dropbox case study above, they provided their clients a quick and easy way to obtain some extra storage, something they knew their clients would want, but wouldn’t break their budget!
Do your research
In a Case Study on the company Roku, a name now globally known, the success of their referral program was directly related to the well-thought-out incentive they provided to their loyal customers. By surveying customers, it was found that nearly 80% were Netflix users. So what better incentive, than offering their referring customers a free month of Netflix? Once they simplified their incentive to something customers were most likely to respond to, their referrals more than doubled! There is something to be said for spending the time to find just the things that will catch your customer’s attention and make them want to refer.
Use the buzz of new products
As a business owner, it is important for you to anticipate when something new is happening or is in the works of happening in your industry. This knowledge can help you incorporate your products and services into the buzz of excitement surrounding this new “thing.” It might even be just what you need for a new referral incentive. A technology warranty company called SquareTrade wanted to see what would happen if they ran a referral campaign, alongside the launch of a new Apple Product in 2011. They used the buzz surrounding the upcoming launch to get their customers to refer over friends and family that needed a warranty for their new Apple products. Here is a summary of their results:
- 10,000 customers signed up to refer in 10 days.
- 14,000 customers participated in the campaign.
- Advocates shared with an average of 5 friends.
- 60,000 shares across Facebook, Twitter and email.
- 2,200 new customers bought warranties.
As you can see, using that excitement of the next big thing in your industry could be very successful in getting referrals for your company.
Test your Options
Ultimately, the very best thing you can do is to find an incentive that will speak to your customers, then test it out. Before offering the Netflix subscription, Roku also tried incentives such as gift cards and cash. You have to find what works for you and don’t be afraid to try something new! Rewardstream offers a variety of incentives for you to consider when planning out your campaign. So once you have settled on that most appealing incentive, its time to use that genius brain of yours and create your campaign strategy.
3. Creating a crazy good campaign strategy
Start with the basics
Beginning the process of your campaign strategy should start with one simple question, “How are we going to get the promotion information to the people that are most likely to act on it?” With referral campaigns, you want to reach as many people as you can that will be the most willing to dive in and see what this promotion is all about. Come up with a strategy from the beginning to the end on how to make this campaign a success!
Variety is the spice of…… promoting.
Get out of the mind set of sending out a few emails and calling it a day. If you are trying to reach a variety of people, you are going to have to use a variety of tools. So dust off that toolbox and get ready to start your referral campaign.
- Contact Current Customers- Make it easy on yourself and start with your list of current or previous customers informing them of the awesome referral campaign you are running! Make sure to include all necessary information, especially their incentive for participating!
- Post to social media outlets- In the social medial world, where people are putting their personal details out their for the world to see, give your followers a break from the “what I had for lunch” updates and give them something valuable to read! Make your posts short and sweet, but enticing enough for your readers to investigate further.
- Direct Mail- As inconvenient as mail is these days, let’s face it, we all like going through every piece looking for something that is worth our while. Print up a flyer or a postcard and mail it out. It will be just the thing to make your referral campaign stick
- Get creative- Your business is unique and it’s important to find ways to promote referrals that are unique to your company. Companies like rafflecopter.com can help you decide on specific details to promote your campaign.
- Do your research- Always have your eyes and ears open for new and successful ways to make your referral campaigns successful. For instance, this article by rewardstream.com, lists out some of the best practices they have found when it comes to referral marketing.
Make your strategy work for you
Most importantly, when creating a plan, be realistic! You know what your limits are, and I am willing to bet that making 500 posts to Facebook a day about your referral promotion, is way beyond! Be smart, efficient and creative, and your campaign is sure to make an impact.
4. What worked and what didn’t
Each time you run a referral campaign, look at it has a learning experience. Take a close look at each outlet you used for your campaign and decide which gave you the best results. This will give you an idea of how to best use your time and money for the next promotion. For instance, if you notice that you got a much better response from your social media posts than direct mail, you might want to consider putting more resources toward social media the next time around.
Taking a good look at the bad results
It’s never fun to look at our failures, but when you examine the failures of your campaign under a magnifying glass to see what truly went wrong, you will gain some knowledge on how to make things better. For instance, really ask yourself, is there something that I could have done to make this more successful? Was it the customer population? Or maybe the outlet of marketing was just not a good fit for your campaign. Whatever the reason it is important to understand the findings and evaluate the failures.
The joy of referral success
Once you have dipped your toes in the referral marketing waters, it is time to bask in the success of your campaign. Even if you got one new customer, that is something to celebrate. Referral marketing is definitely a learning process. Creating a largely successful campaign takes time, patience, creativity, and thinking outside the box. Remember to do your research and keep learning about great referral marketing strategies and listen to Steve Jobs and ask for help when you need it!