Imagine when an electronic device in your home breaks down and you are not electronics savvy, the first thing you will usually do is not immediately buy a new device or surf an electronic device web for reference. You tend to ask your acquaintances or friends who have experienced those devices for information. This is the magic of word-of-mouth marketing. A referral program is the most magical and effective customer acquisition strategy built from that word of mouth marketing, and it works for all types and sizes of businesses.
Referral program ideas can determine the success or failure of your campaign, based on whether it's Mr. Right for your business or not. Well, If you are thinking about starting a referral program but don't know how to do it right, this article will cover all the information you need from A-Z. We'll show you how to build a customer referral program, provide tips for running a successful program, and most importantly offer the best referral program ideas for your business. So, buckle up because this is gonna be a long ride!
- An Overall Get-To-Know To Referral Programs
- What exactly is a referral program?
- Types of referral program you should know about
- Why a referral program is beneficial
- How To Create A Customer Referral Program In 8 Steps
- Set achievable goals
- Define target referral customers
- Define your referral reward system
- Set up your referral platforms
- Design your referral program platforms
- Launch your campaign, track, evaluate, and improve
- Run consistently and up to date
- Say "Thank you" to your customers
- 4 Tips To Run A Successful Referral Program
- Make sure your referral programs are accessible and easy to find
- Customize sharing options
- Make referral an easy game for referrers
- Conduct an NPS survey
- Top 12 Referral Programs Ideas To Give A Go
- Include your referral programs in the customers' Thank-you letter
- Collect online reviews
- Run holiday referral campaigns
- Tier the referrals
- Exclusive events
- Reward discount/cash
- Product or service upgrades
- Mystery gifts
- Build referral partners or run affiliate programs
- Give-to-get referrals
- Give a higher reward for the first referral
I. An Overall Get-To-Know To Referral Programs
01. What exactly is a referral program?
The first concept to mention here is referral marketing. Referral marketing is a strategy that incentivizes existing customers to recommend you to their network (who will be called referred customers), also known as word-of-mouth marketing.
So a referral program will be a marketing strategy where your business has particular plans and rewards to encourage the existing customers of your business to make their network a new source of customers more regularly. It is a win-win relationship where your current customer gets rewards and emotional pleasure.
02. Types of referral program you should know about
There are four most basic types of referral program:
i. Word of mouth (Direct referrals): This form of direct marketing has been around since companies existed. This can be considered as the cheapest and most effective form of marketing you can find, because no one is taxing your words, right? (duh)
- Report of Global trust in advertising from Nielsen have shown that over 92% of customers say they trust recommendations from family and friends over other forms of advertising.
ii. Email referrals: Email marketing is becoming more and more popular and can even be quite effective compared to other social networks. Companies can sustainably connect with their customers more efficiently and proactively.
- Imagine if you are a regular customer of a particular brand and timely receive a customized email with your name on it. It also provides you with information about new products, promotions or events along with clear CTAs without wasting time updating those surfing the web. Wouldn't that be how much you would feel appreciated?
iii. Referrals through reviews: Another referral program is through reviews on the brand's online sales pages. This is not only practical when referred customers can read from whom have experienced the product before deciding to purchase, but it also helps your brand understand customers' opinions to improve its services and products.
iv. Social media referrals: In today's information technology era, it is impossible not to mention social media referrals. It is a handy form of targeting a massive customer group at a time just through a share button.
All you need to do is post interesting and valuable brand information for your customers, who will share it with their social media network. Or simply when someone asks for recommendations on social media, your customers will recommend your business based on your brand's matching features.
03. Why a referral program is beneficial
Here is an infographic to help you understand its benefits more easily:
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II. How To Create A Customer Referral Program In 8 Steps
01. Set achievable goals
Obviously, to start with any marketing plan, the first thing to do is to set clear goals for your campaign. To get the most out of your goals, ask yourself these questions:
- What do you want to achieve through this campaign? (sales volume, customer connection, new customer acquisition,...)
- How long should each goal take? (How many stages should you divide each smaller goal?)
- What factors will your goals be bound by?
- How will each goal affect the other goals in the plan?
Remember that a goal may sound abstract and challenging to achieve at the beginning, so break it down, separate it into different stages and progresses, and draw the connections within the goals. Once you have firmly decided on your goals and defined them explicitly, the next steps of the plan will lay themselves out for you.
02. Define target referral customers
Running a referral program doesn't always bring you new customers, because not every customer will go to your business. It’s time to take a step back and understand where your good fit referrals will be.
- First thing first, list all the potential customer referrals available to your business. Please divide your possible customer source into old customers, existing customers, KOLs, and influencers, ... to have appropriate referral plans for each group.
- Next, you need to clearly identify the leads and ideals that you want to bring in through your referrals program. To serve your long-term goals, describe to your referrers the file of customers you need so they know that you are in need of the right individuals for your brand - people who will actually be the “good fit” for your products, not just anyone who may care about the brand.
03. Define your referral reward system
An infographic to help you understand the referral process.
Well, and now you have completed the first steps of the program. Next, you will need to consider deciding on the correct referral incentives for your referral program. The essence of this program is that customers will think about what they will get by referring your brand to others, what motivates them to spend time and effort participating in the program. You will need to figure out these questions:
- Who: Who do you want to give referral reward in this program? You can choose to reward either your existing customer (the referrers) or your referred customer. This is called a one-sided incentive. The other way is to reward both the referrers and their friends who are referred. This one is the two-sided incentive.
- What: What do you offer? You can consider many incentive types for your customers, such as cash, discount codes, gifts or enhanced services, etc. You need to find out which will be the most attractive. For your customer base, which form will represent your brand identity and which format will be most beneficial to you. Then combine those elements to choose the right format.
- When and How: The last thing you need to decide is how you will offer rewards to your customers or in other words your reward structure. There are many ways for you to choose such as keeping the reward for each referral the same, dividing the reward into tiers, or having different rewards into small steps that require referrers to do it,... In short, no It is imperative that you use it throughout your program. You can change the form of rewards according to timelines or occasions to be more creative in the way they reward and engage customers.
04. Set up your referral platforms
You can choose one or more platforms for your referral program such as social media, email, messaging, website, etc. Any way that helps you to communicate with your customers effectively . This should be based on your company's research on the platforms that your customers trust and use the most, it will help you focus on a large number of customers to bring the best results. For example, with individual customers, you can choose email as the main communication channel with them, and they will also feel interested when the brand you use updates them personally. chemical. As for a set of customers like KOLs or influencers, you can choose to run the program on social networks because that is where their main activity is.
05. Design your referral program platforms
- First of all, come up with a message you want to convey to your customers. This is one of the most critical steps you need to pay attention to when creating your customer referral program because it’s closely tied to everything from the way you choose your incentive structure and promotion of your referral campaign to your landing page. It needs to include all 3 most important factors:
- Concise, clear and easy to understand
- What your targeted customers will receive when participating in the program
- What makes your program different from other competitors
- Design your landing page creatively and effectively. This is how the customer's first impression of the scale of your program as well as represents the image of your brand. Remember that being creative and modern doesn't mean frills. Make your landing page look as simple and eye-catching as possible, enough that your customers can quickly grasp the leading offers and messages of the program and do not miss other information due to the blocks. of text. In addition, adding a FAQ section. It will help your customers quickly answer their questions and make it easier for you to update and edit relevant information.
Related article: Everything You Need to Know About Landing Page SEO In 2023
06. Launch your campaign, track, evaluate, and improve.
After completing the background steps for your referral program, the last thing to do is launch it and deliver it to your customers and see the magic it does.
However, miracles can only happen when you control the background elements entirely and keep them in top shape. So always keep track of your campaign and compare it with the set goal to see if everything is going according to plan. And if not, there is something that is not good, where do you need to fix to get the best results. Always treat your referral program like a living organism. There are also many tools available that are designed for you to easily track and calculate metrics automatically.
07. Run consistently and up to date
Once everything is stable and on track, you need to keep it running and promote your program to customers. Always remind them that we always have incentives for those who refer our products to their friends, and your friends will have gifts too!
Besides, you also need to always pay attention to updating your offers to match the competitive market as well as your products, and current trends in the market. This will make your customers feel more motivated and find the program attractive enough for them to keep promoting your products to their acquaintances.
08. Say “Thank you” to your customers
It doesn't sound like much to the process of creating a referral program technically. But these are the minimum ways for you to show the professionalism of your business by thanking them for recommending your product and thanking the referred people for trusting and testing your product. Doing this not only demonstrates your gratitude to them, but you also satisfy them, thereby increasing their trust in your business and they will be more satisfied when recommending your products. you to others. Just a small and easy peasy lemons queasy thing, then you can stay tuned and see how great of the results it will bring!
III. 4 Tips To Run A Successful Referral Program
01. Make sure your referral programs are accessible and easy to find
After launching your referral program, make sure you add it to your website and social media pages as informative and easy to find as possible. Make them stand out so that customers can see your program and its landing page when they visit your site. Pay attention to all platforms where customers can see information about the program, such as:
- Attached at the end of each email
- After or before the customer goes to the payment page
- Blog post
- Website homepage
- Leaflet or referral card in each package sent to customers
02. Customize sharing options
Let your customers be creative in conveying referrals to others. And also try to be as creative as possible to introduce to others:
- Help them create a landing page with their own referral code. This will interest a specific set of customers and are often "real fans" of your business. They will not hesitate to have the opportunity to get closer to the industry by creating their own mark in the way of information transmission. This also helps their network have better trust with your brand when learning about it
- Help customers tell the story of their own experience with your brand and use the referral program as a primary CTA. You can ask them to write their own and repost or interview specific clients to get testimonials and include them on the main media page of the program with a CTA.
03. Make referral an easy game for referrers
Don't let your customers have to spend too much time to be able to refer to others. Try to keep the design simple and clear so that they only need a few mouse clicks to share information to their network. Let the key information such as offers, CTA, time, policy catch their eyes in the most concise and comprehensive way possible.
This requires you to focus on the design part of the referral program. Highlighting the referral program Headline and Message will help both existing customer and referred customer know what they will get when they join. Then attach the referral program Landing page , your referral link and CTA right below.
04. Conduct an NPS survey
Conducting a NPS survey is useful not only before building a referral program but also after it has been launched. If you previously used the NPS survey to find the main customer base of your program as well as the goals for the referral program, then after the referral program has run, you can continue to optimize and improve your referral program. This will help you find out who resonates with your show as well as dig into the reason why it didn't work with some groups of people.
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IV. Top 12 Referral Programs Ideas To Give A Go
01. Include your referral programs in the customers’ Thank-you letter
Choosing the right time to ask your paying customer to refer a friend can also decide whether they choose to help you or not. And there is no better time than when you express your gratitude to your current customers. When you thank your customers for trusting your business, they feel grateful and that makes your business more relatable and connected to its customers. Just a few brief lines introducing your referral program, what customers will get when they join with referral links of the campaign is enough for them to feel happy while being taken care of with your service without feeling like you're trying to demand anything from them.
02. Collect online reviews
Online customer reviews on online stores is one of your biggest sources of indirect referrals - because they already refer your product to all the people searching for it. So always actively tell your customers to leave a review after using your product or service. Give them certain offers for leaving reviews on online sales sites such as leaving a comment to receive 10 accumulated points or 10% discount for future purchases.
03. Run holiday referral campaigns
Major holidays or seasonal changes are also times when people shop many times more than usual. Plus, it's a limited time period so increasing your holiday referral offers a little bit more than usual and setting a shorter deadline can spur a large number of new customers to consume your products. Different occasions are also a way for you to innovate and customize your ecommerce store design accordingly.
04. Tier the referrals
For businesses that want to attract more potential customers as well as maintain the program in the long-term, dividing the customer tiers is a good referral program idea. Instead of providing customers with a one-time referral offer, this will encourage customers to refer friends in the long run - because it encourages customers to be more active to accumulate more incentives over time and the number of people they refer.
Another referral marketing strategy is fundraising. Explain to the customer that for each successful referral and they pay for a certain product, the company will contribute to the funds the corresponding amount. Naturally, people love getting behind a good cause, particularly one that aligns with their moral compasses. Not only do they not lose anything by recommending a good product to relatives and friends, but they can also contribute to the community.
06. Exclusive events
Different from other referral incentives related to money or discount, give your loyal customers a special offer that cannot be bought for a special occasion. For example, the offer here could be an invitation to a product launch, to try the product before it is released. For those who have put their trust and a certain interest in your product. They also don't want to miss the opportunity to experience the innovative products you are about to launch as a special guest of the brand.
07. Reward discount/cash
The most common way is to give cash or discounts as rewards for referring customers. This method is not only easy to implement, but it is always practical and can be applied in any product line. A little discount or cash, although not much, will be extremely effective when they are about to pay for your next product.
08. Product or Service Upgrades
Referral rewards are amazing forces for customer referral programs since they both draw in new leads and they energize current customers to proceed utilizing your products. If you do not have an updated item or benefit to offer, you'll be able instep present clients to beta highlights, items, and administrations that the rest of your client base doesn't have.
09. Mystery Gifts
Neither monetary rewards nor premium service, the real value of this offer lies in how "mysterious" the free gift is. Most referral programs show that rewarding customers are more excited about receiving gifts than cash. How can anyone criticize freebies more than that, the element of surprise here will satisfy them. It doesn't need to be too luxurious or expensive gifts, you can even use products that are left in stock or useful products that are a bit out of trend.
10. Build referral partners or run affiliate programs
Every business needs customers and they all care about sales. So connecting with another business that has the same customer base as yours is one way to create a win-win relationship. They can be a stable source of new customers for you and vice versa.
Another referral program idea is running an affiliate program. Although it is not a referral program, affiliate programs also work in a similar way, but the main audience here is usually 3rd party companies or certain influencers through social sharing links. This will help you reach new customers through their network.
11. Give-to-get referrals
This is typically how a two-sided incentive works. For instance, when you invite each friend to join the program, you’ll get a discount of 5% for your next purchase and the referred one will get 10% off for their first order and your offer can be accumulated up to 50% off corresponding to the number of people you invite and they complete their first order.
12. Give a higher reward for the first referral
Instead of keeping the same bonus level as the original, try to have a higher offer for people who refer a friend to your business for the first time. This not only does not change the benefits of existing referrals, but also attracts more referrals for you.
For example, you usually get 20 dollars for each successful referral (when the referrer pays their first bill, then the referrer will get 30 dollars with this idea.
So now you can see the power of word-of-mouth marketing through referral programs for example. Not only is it a low-cost and practical form, but it's also not too difficult to learn and run if you dig into it. However, the value it brings is long-term and cannot be accurately measured.
We hope that through this article, you have had an overview of referral programs in general as well as brought back some referral program ideas for yourself in particular. We believe you can start your referral campaign right now if you fully grasp it. Thanks for your time and please look forward to more blog posts in the future!