How to jumpstart your referral marketing

Leveraging your existing users is a powerful tool to help drive new customer growth at a low cost. Below are a few strategies you can implement to keep that funnel flowing.

Identify your referral strategy

There are several ways to generate referrals. Generally the most effective referrals programs are ones in which you reward the user for bringing you new customers. However, there are other creative ways that might be unique to your business. A combination of the following tactics can enable you to have a multi-pronged approach to your referral marketing strategy.

  • Double referral: This works well because the referring user’s message will have more authenticity and also increase the chances they will share it. Menundies.com is a great example of an effective referral marketing program. Every time you successfully refer a friend you get $20 and as a referrer you give your friend a coupon code to get 20% off their first purchase. This drives new customer growth while increasing the loyalty of an existing customer.

Pop-up widget that appears when you click the “Refer” link in the footer

  • Site integration referral. For a site where there is a social network effect of more users joining or a benefit for that user to bring in friends, the social connect invite model works extremely well. A great example of this is on sosh.com. Once you connect your Facebook or Twitter accounts you are able see which of your friends are in the network. If they are not yet in the network you can invite them to join with a simple click that sends a request to join.
  • Physical good referral: Apparel/Gifts as a referral reward can have a doubly positive effect. First customers love to receive gear, but if the gear is witty or well designed these customers now become walking billboards for your company. After that initial cost, you now have free advertising wherever your customer goes. Shirts are the most common, but water bottles, coffee mugs or other items that are used everyday by your customers can be great rewards.

At launch Sosh gave a shirt to every user who referred a friend to sign up

  • Charitable contribution: The gift does not always have to come back to the customer. In some cases the referral rewards can be in form of charitable contribution to a non-profit that is aligned with your company. This can result in a positive emotional reward for the customer.
  • Gamefication: If it makes sense have a referral leaderboard to show which users are driving the most referrals for the month and instill some friendly competition amongst users to refer more friends.

Building your referral program

Once you have identified the strategies it’s time to implement them. There are several companies that have out-of-the box solutions to integrate into your site. Some the more popular ones are friendbuy.com and talkable.com. While they have great features and analytics, they can be fairly pricy for a younger start-up. You should review the service options and cost to figure out if it makes sense. Most services quote 10–20% lift in sales but it can vary depending on your business. Another avenue is having your developers or hiring a freelancer on a site like elance.com to build the basic referral mechanics.

When designing your referral program make sure make it as easy as possible for the user to send the referral. For example have customized copy ready for the email or social referral. The more hoops a user has to jump through the lower the share rate.

Where to set up your referral triggers:

There are several touchpoint in the customer lifecycle that can be considered effective times to market your referral program.

  • Confirmation Page: Once your customer has purchased, give them the opportunity to share their purchase with their friends either through email or social networks.
  • Post Product Arrival/ Sign-up. After a user has received your product or been using your service for a couple of weeks, engage the customer via email/ mobile notification/ text and encourage them to share their love of your product or service.
  • Site banner: Have a persistent banner/ link on your site every time a visitor returns. It will serve as a constant reminder and may be the trigger that also leads to a repeat customer.

Naturebox.com has a persistent banner on the top of their site

  • Email banner: In any drip marketing or one-off campaigns add a referral banner in your email.
  • Affiliate: Have an affiliate program offer that gives publishers a commission for converting new customers. One of the most popular affiliate programs is Linkshare.com but there are many other options to choose from.
  • Offline: Give your customers or complementary business partners cards to display at their shops. You can also hand out these cards in areas where your potential customers shop.

A unique and creative card concept to share the business with a friend. Designed by Threefold Collective

Always be testing

You will continually want to refine copy, creative and offers across each strategy. It’s important to refresh offers as they can become stale over time. This can be done with a/b testing to find the right message or offer. In some cases it could be valuable to ask your customers through a quick survey what type of incentives/ rewards will encourage them to more readily share your product or service.

Recap

  1. Prioritize which set of referral marketing tactics will efficiently yield the most customers
  2. Evaluate and pick a referral service or build one from scratch
  3. Identify and map out the customer touch points where your customer will see the referral program
  4. Continue to test and refine copy, creative and referral offers across the different tactics to improve conversion rates.

Had success with other creative referral tactics? Drop them in the comments section.

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