How to make the most of referral marketing?

If you are a business owner running a new marketing strategy for your company you may be interested in a referral marketing idea. We have provided some guidelines for starters that you may be interested in. But if you’re already running or just preparing to launch a program and you are wondering what are the benefits of a referral marketing campaign and how to make the most of it, you’re in the right place.

As you probably already know, referrals are a great way to boost your business. About 90% of people trust recommendations from sources they know, like a friend or family, so it would be beneficial if your users talked positively about you. After all, this form of marketing is often called word of mouth marketing. How to make the most of it?

Right now it’s not so easy to stand out in a crowded market of providers who are trying to outdo each other with their marketing ideas. So it’s definitely hard to draw customers’ attention and get them talking about your brand, but it’s not impossible either. With our tips, you’ll be able to pique users’ interest and make some noise about your brand. In other words, you’ll be able to make the most of your new or existing customer referral program. Thanks to that, you’ll be able to build long term relationships with your clients, expand your customer base, solidify your brand’s market position and increase loyalty among the users.

Ready to learn a great dose of practical knowledge?

Why is it good to have a referral program? 

Thanks to implementing a refer a friend program into your marketing strategy, you can make a huge difference to your conversions and sales. What’s also a big plus is that satisfied customers who come to you thanks to referral campaigns will have a longer lifetime value than those who don’t. In fact, this piece of research found that the CLV for new referral customers is 16% higher than non-referral ones. It allows you to expand your customer base. No need to mention that your brand awareness would be sky-high with such a program then.

When it comes to the numbers, higher revenue and ROI (return on investment) are simple facts. Just take a closer look at the Dropbox famous referral program: thanks to referrals they could have chosen to decrease marketing costs to practically zero. Moreover, there are many examples of successful referral programs that have brought countless profits to the companies, such as Uber, Google and Amazon Prime, just to mention a few. At the same time, it is worth keeping in mind that a successful referral marketing program doesn’t mean a huge investment. Comparing to other marketing channels or forms of advertising, its costs are very low.

So the question here is: what should you do to follow their success?

Put your customers first

In order for your customers to start sharing positive opinions about your company, you must meet certain conditions. First, you need to treat customers well enough for them to be 100% satisfied. Otherwise, the opinions they share may instead turn out to be negative ones. Second, remember to provide the best quality of services or products that you possibly can. Customer service and the response times to resolving any issues are also important. Anyone can make a mistake, so what’s important is to react quickly and compensate for any damage.

As you already know, communication with customers is crucial. Not only via your customer service or subscription newsletter, but also the content of your website. If its appearance doesn’t encourage potential customers to stay, then why would someone recommend you? Use colors that are neither too bright nor too bland, so the text doesn’t blend into the background. Next, it’s all about functionality: a visibly placed menu with logical and clear texture categories. It’s also crucial to have a built-in search engine that is easy to find and works properly since customers might often visit your website to find a particular product.

What’s more, the descriptions and photos of the products themselves should be made professionally: high resolution presenting the products in all their glory, and descriptions that provide real value without being overly long. They should only contain the most important information and technical aspects of the products.

Set the rewards list

If you know your target audience well then you should know what will most encourage them to participate in your program. You can vary the type of referral rewards depending on the thresholds reached by referrers, and the incentive for the new customer should also be different. It’s best to encourage a customer who is getting to know your brand in a different way to one who has been with you for quite some time. For new customers, free stuff for orders – e.g. a bunch of samples of your bestsellers or travel-size testers – would be a good choice. The rewards might also include free ebooks demonstrating how to make the most of your products, or standard referral discounts codes – after all, everyone likes to save money.

For current customers, as you might expect, cash reward also comes into play. A good option would be for them to collect points, a greater number of which can be exchanged for prizes of increasing value. This would be an extra incentive. In this way, everyone will be able to decide for themselves what they will find most useful. Variety is a good solution when it comes to types of referrals and their rewards.

It’s vitally important that you contact users when they are most convinced about your brand, i.e. right after shopping or setting up an account. Whether they reached your site directly or via a referral link, you should invite them to join your refer a friend program. The more, the merrier, right?

Choose seamless referral program software

The tools you use are crucial to getting 100% out of your work. This rule applies to most activities, including marketing. So how do you choose the best referral platform? Check out EarlyParrot. In order for your plan to run well, your referral program software should be easily integrate with other platforms and tools you use. EarlyParrot has a very long list of available integrations from WordPress, through Shopify, to MailChimp. Moreover, if you do not find your platform on this list then you can contact an EarlyParrot rep who will try to find a solution.

Moreover, the installation process should not be an Enigma. With EarlyParrot, it definitely isn’t, as the whole easy and intuitive process takes less than 15 minutes without any IT knowledge required. Once installed, you can integrate EarlyParrot with your landing page and start creating an effective referral program.

This doesn’t take long either, but you must be clear about what you want to achieve, what incentive you wish to set, and who you wish to reward. Each step is clearly defined, and the referral software won’t let you publish an unfinished program. It checks whether everything is fine and highlights any aspects that need improvement before letting you go live.

What’s more, EarlyParrot supports the whole communication across various channels. You can set up email templates, posts on social media, and all client-facing pages. Plus there’s no EarlyParrot logo, so you can be sure that all users will be able to identify your brand’s referral campaigns.

Present customer feedback well

When users are searching for the right products online, they very often look for reviews about them. Therefore, you must ensure that all loyal customers reviews are well presented on your product pages. You shouldn’t be afraid of negative reviews if you do get any, as positive ones will neutralize the tone. Opinion-forming portals like industry forums are also important. A good solution is to combine the power of recommendations from friends and influencers, i.e. affiliate marketing

Imagine a situation when a potential customer is trying to figure out what product to choose from in a given category and from which store to order. The client is looking for information on the Internet and finds a YouTube video about one of the products under consideration. The video is almost enough to convince the customer, but for them it’s still worth asking a friend who can be trusted more than the influencer. The friend also recommends that product and offers a referral link. The only dilemma the customer faces is which link to choose, the affiliate or the referral link. Spoiler alert: the referral would probably be chosen because a relationship with a friend is stronger than that with an influencer. Recommendations from friends are type of social proof, this is one of the advantages of referral marketing over affiliate marketing.

As you can see, synergy effects are crucial not only in sales but also in marketing. Therefore it can be very beneficial to use the power of double recommendations.

Keep testing

When it comes to working with people, remember that there is no such thing as a permanent solution. Preferences change, and so do your target audience or market trends. It’s very easy to track the effectiveness of referral marketing strategy, so it’s definitely advisable to do so. With EarlyParrot you have all of the most important metrics at your fingertips. You can see how many clicks a given link received and whether those clients shared them with the same enthusiasm at all times. You should bear in mind that offering the same referral reward for an extended duration may not prove successful in the long run. Play around with your rewards, perform A / B tests to make comparisons, and ask your clients for feedback via email surveys.

Keep your finger on the pulse and always be willing to check and change. This is the shortest recipe for success, and it basically always works.

Over to you

Referral marketing is often an underestimated solution, since a well-made program will essentially drive itself as happy customers recommend your products or services to each other and the word continually spreads. Even though it is based at customer relationships, great deal of the scope and effectiveness of these activities depends on you. In order for people to want to share positive opinions about your brand, you must have something to offer them and a USP they can talk about. Whether that will be great discounts for customers, a wide range of available products, or incredibly reliable customer service – standing out is your first assignment. 

The next task is to choose the rewards. Few people are willing to do something for free, which is why they are so important. The referral program software is another aspect that is important for your refer a friend program to run smoothly and for staying in touch with clients. The chosen referral marketing software should also allow you to monitor the performance of your program. Speaking of performance, leverage the magic of synergy and put some effort into presenting client’s recommendations or cooperation with influencers well. Doing so can only boost your referral marketing results.

Last but not least, keep your finger on the pulse. You need to stay up to date if you want to be sure that the referral strategy is working. That’s why you should continually track the performance of your programs and make any necessary changes. Only this way will you be able to maximize the full power of referral marketing strategy.