Long held marketing beliefs coupled with hard data on existing referral networks demonstrate that encouraging your loyal customers to spread your brandâ€™s message is perhaps the best marketing tactic there is. Indeed, people tend to trust recommendations from their friends and family more than marketing messages and advertisements.
So referral marketing schemes tend to increase a consumer audienceâ€™s size between two and tenfold. The more you can push your happy customers to talk about your brand. The more expansion your business is likely to see.
Referral Marketing Strategies and Tips for 2017
However, not every referral marketing program is destined for success. As in other marketing campaigns, you must be sensible in your referral marketing plan to ensure participation and increased profits. The following four steps will make sure your referral campaign works for you.
Method One: Analyze Your Market and Product
Not every market is ripe for referral marketing, and not every product fits the model. Just like you did when you designed your business plan, you should analyze your market and product to determine whether consumer demand is high enough for you to benefit from a referral program. Using core business metrics to garner qualitative and quantitative information, you should be able to determine whether your product adoption rate is ideal for a new marketing campaign.
Rather than waste resources performing your own market analysis, you can hire a third-party research firm to crunch the numbers. Typically, they will perform a few tests to understand two key features of your business: your net promoter score and your company health.
Your net promoter score is a simple customer feedback survey that reveals whether you are delivering what your customers expect. If you score high, you are likely ready for a referral program.
Your company health test assesses your businessâ€™s growth. Including your customer lifetime value, your monthly recurring revenue, your conversion rate, and more. To ensure the referral program isnâ€™t merely a bandage intended to cover poor performance. Only a healthy company will see positive results from marketing.
Method 2: Optimize Your Conversion Funnel
Some digital businesses in particular devote overwhelming time and energy to building interest in a referral program only to see poor conversion rates at the end. A primary cause of poor conversion in referral programs is a poorly designed onboarding process which forces participants to complete unnecessary tasks to reap any benefits.
A conversion funnel is a sales channel that starts with a landing page. This page is designed to entice the visitor deeper, ultimately prompting some kind of action or response. The response can be an email subscription or lead. Or it can be the sale of one or more items that can be physical or digital products.
Types of Conversion Funnels
Often complex funnels include upsells and downsells that are triggered depending on user input. For example if a customer purchases a slogan T-Shirt they might be upsold a hoodie with the same slogan. Or if the product is digital common type of upsells include unlocking premium features and so on. Having an awesome funnel simply makes it easier for referrers to send you more business and in doing so make money themselves.
You should make it as easy as possible for your customers to sign up and start referring; likewise, it should be easy for new customers to start buying your products. You should devote more time to optimizing your funnel, perhaps adding auto-fill text, referral templates, using social media sign-ons, and more.
If you are interested in learning about properly constructing digital sales funnels. Then there are affordable tools that help digital and affiliate marketers build them. Examples include Clickfunnels and Leadpages. Additionally there are many agencies and contractors skilled in their use. These kind of tools live in the cloud so they are subscription based.
Do It Yourself Funnel Building
There are other funnel and page builders such as ThriveThemes that allow designers to build beautiful funnels and landing pages off their own servers. WordPress is a popular CMS platform that has support for such tools, by way of plugin installation.
Method 3: Announce Your Referral Program at the Right Time
If your happy loyal customers donâ€™t know about your referral program, they wonâ€™t participate. Then again, if only your unhappy customers know about your referral program, your participation rates will also be low. It is important that you announce your program at the appropriate juncture in a customerâ€™s interaction with your brand.
For example, you should leverage happy moments to push your referral program. When a customer buys a product or has a positive experience with your support team, send a program invitation. Further, it is important that you avoid burying your program on your website; there should be access to the program from root navigation and plenty of banner ads to remind site visitors of their participation option.
Method 4: Reward Your Enthusiastic Customers With the Right Incentives
There are a few incentives that motivate almost all consumers such as money, free stuff. Yet itâ€™s more than likely that your specific audience is especially motivated by specific rewards. Before or during your referral program, you might experiment with different incentive structures and options. To determine what makes your customers leap into action. Some options for testing just how well this works include:
- Single vs. double-sided prizes: You can choose to reward just the referring customer or the sending customer and the recipient of the referral. Single-sided programs keep costs low, but double-sided programs perhaps positively changes a referrerâ€™s motivations within his or her network.
- Monetary vs. non-monetary prizes: Awarding discounts or cash is a safe bet. Perhaps your customers merely want to feel appreciated through their program participation. You might consider awarding company swag, access to exclusive content, premium features, or other non-monetary options.
- Uniformity vs. diversity: You can tinker with furnishing every program participant with the exact same prizes or offering various options to suit differing wants and needs. Though the latter adds complexity to your program, it might also resolve issues with varying customer motivation.
Further Insight Into Referral Marketing
There is no doubt that researching best practice for conducting a referral marketing scheme involves much testing. Along with a fairly steep learning curve. There are however many digital tools that simplify some of the processes. Platforms exist for instance that streamline the otherwise complex nature of building sales funnels. The same is true for tracking platforms that calculate digital referrals ( affiliate marketing. )
For extra insight onÂ implementing sound referral marketing strategies into your business. Be sure to view our choice selection of referral marketing videos in the application below. These videos offer additional perspectives from a range of quality sources.
Other factors to stay on top of include the non technical stuff. Aspects such as having robust terms and conditions and payment systems for tracking revenue and attribution. While is certainly the case that Â mastering referral marketing requires a broad skill set.
Digital marketers and offline marketers will be appeased by the fact that there are so many powerful platforms and tools that make aspects of referral marketing much easier in 2017.