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You already know that the key to bringing in new business is through word of mouth marketing. If a customer is super happy with the product or experience you offer, they’re likely to recommend you to their friends and colleagues.

Thing is, a happy customer doesn’t necessarily mean a vocal customer. That’s why companies of all sizes bake referral strategies into their marketing plans.

“Lots of entrepreneurs put a lot of weight on the virality of things, but that’s not how it works,” said Alex Furmansky, Founder, and CEO of Budsies, a company that creates custom stuffed animals. “A referral program is one piece of the much bigger marketing strategy, but it’s a necessary piece.”

So how can you jump-start the referral process at your company? How can you encourage happy customers to share with their friends, and give those existing customers a winning experience? How can you build a referral strategy into your business that brings in new customers?

We talked to some founders about their referral strategies. Here’s what they had to say:

1. Make clients 200% happy all the time

The first step to referral success. Offering kick butt products and services that make your clients over the moon happy. This happiness translates seamlessly to referrals.

“Believe it or not, I built my entire business through word of mouth referrals,” said Ritika Puri, Founder of Storyhackers, a Silicon Valley-based marketing firm in an interview with Grasshopper.

But Ritika didn’t get these clients because she’s lucky– she got referrals because she does amazing work. “I genuinely love getting to knowhttps://referralrock.com/blog/referral-programs-101-everything-you-need-to-build-a-referral-marketing-program/ my clients and love to make them 200% happy,” she said. “I am very passionate about (and completely believe in) the work that my clients are doing. This passion guides me towards amazing projects and people.”

You have to sell something top notch and be passionate about it– if you’re not, customers won’t refer you.

2. Create incentives

Although happy customers are likely to recommend you to others, they might need a push to do so, which is where incentives come in.

Joni Holderman, Founder of Thrive Resumes, offers clients a free resume update when they refer a friend. “Since I started the referral program, it generates 82% of my new business,” said Holderman. “I offer clients a free resume update when they refer a colleague who purchases a resume.”

Alex Furmansky of Budsies believes that brands should make sure the referral program rewards the existing customer, as well as the person they refer. “I think it’s extremely important to have a two-sided referral program– the existing customer should get a reward, but their friend should get one as well. For us, the existing customer gets a $20 gift card, and their friend gets 20% off a current order.”

3. Make it part of the greater customer experience

The team at Budsies doesn’t provide a referral program just to make more sales. Furmansky believes that the program gives value to existing customers and that it adds to the larger customer experience.

“We really care about our customers’ happiness,” said Furmansky. ”We provide consistency across the experience. Our referral strategy is part of a real, heartfelt program that gives, even more, value to our customers.”

Budsies is a very emotional product, and it creates a unique, jovial, happy experience. Furmansky believes that the referral program is an extension of this experience, helping customers share those positive feelings with their friends and family.

“We don’t treat referrals like just a transaction,” said Furmansky. “We’re creating an experience, and we want our referral program to help develop a bond with our customers.”

4. Value customers and their time

Companies doing a referral program must know their customers well enough to offer something of value, but they also need to respect their time. A customer isn’t going to jump through hoops to make a referral.

“The program must be simple enough to take as little time from customers as possible,” says Vahagn Aydinyan, Digital Marketing Manager at TTAG Systems. “No one will spend more than 5 minutes trying to figure out what are the referral program requirements and what to do next.”

It’s your job to make the referral program as clear as glass. Create a page on your website that outlines the program, and make sure that the program won’t suck up any unnecessary time.

5. Measure referrals as you go

As a marketer or customer engagement specialist, you should know how you’re acquiring customers. Do they find you via social media? Do they come to you via a referral or recommendation? Do they wind up on your website after clicking an ad?

If you have a referral program, you should monitor how many customers are taking advantage of it, and adjust constantly to ensure the program is as successful as possible.

“You should measure performance constantly,” said Kevin Conner, President of VastBridges. “You should constantly be optimizing for the greatest possible success.”

To monitor the program, you can use software solutions such as Referral Rock, but you should also be keeping an eye on Google Analytics to figure out what leads customers to your site.

Advice from founders

A referral strategy is an essential part of your overall marketing plan, so keep it in mind! In order to generate referrals, you must offer an amazing product, an overall excellent customer experience, and keep monitoring the strategy as you go.


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Posted by Emma Siemasko

Emma Siemasko is a writer for Referral Rock and the Founder of Stories by Emma, a content marketing consultancy. She specializes in writing about startups, marketing, and customer engagement.