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Referral programs may take some time getting started – but can definitely be worth it. You need to make sure your input does not exceed what your expected outcome is. Don’t want to waste your time on something that isn’t working. And certainly do not want to waste your money.

Before you invest too much of your effort and money, you may want to make sure a referral program will work for you. You can see if a referral program will benefit your overall ROI, or simply understanding the strategies. You need something that resonates with your customers and the people they refer.

It’s good practice to test how effective your program is before launching it to the public. If you put in a little effort, your referral program may help you significantly exceed your goals. So you may want to take the time to create the best referral program for your business and customers. A program can’t work if your customers are not interested. Here’s an article we wrote about leading indicators for your referral program success.

According to Heinz Research, more than 70 percent of companies with a formalized referral program will meet or exceed their 2015 revenue goals.  Many studies have proven that referral programs can drive business significantly. Perhaps before doing a program kick-off take the time to hone in on what drives participation. Also, test what doesn’t. Every business is different. What drives customer participation for some may not work for others.

So, what are some ways that you can make your referral program worthwhile for everyone?

1. Test the Waters 

What better way to see what your customers would be interested in, then by actually asking them. Throw out some bait and see how many of your customers take a bite.

Perhaps you could use something like the Net Promoter Score. You can try a Facebook survey asking “On a scale of 1-10, how likely is it that you would join our referral program?” to determine how many of your customers would actually use the referral program.

Remember to think of who your customers are and what they would be interested in. Make sure those items are relative to your company’s niche. Be sure to mention the benefit of joining the referral program. Do this while exploring how much interest there would be for implementing a program. You have to create a program that will make people want to join. Since you’re asking for that specific feedback anyway – your referral program should be golden.

netpromoter scale

2. Empower Them

What are your customers looking for in a referral program? Why not ask your more loyal customers. Your best customers know you and your brand – so why not use them to sculpt your referral program.  By using segmentation you will be able to receive honest feedback. Customers who already like your brand so they want to see success too.

This may go hand in hand with testing the waters, but you can use that same idea and ask your past customers in other ways. For example, if you send out a newsletter try adding a blurb that your company may install a referral program. Don’t forget to mention any incentive ideas you have for the program. You may even promote this idea on invoices and receipts. Your best customers are a great resource. Not only will they let you know their opinions, but they are also the ones who will share your brand. The more your customers hear about the upcoming program, the more excited they will be. This will result in good quality leads for you.

ask loyal customers to refer

Note:

You may consider asking what types of incentives they would like to see in the referral program.  Also ask what type of referral program (Contest, Goal-Based, Instant Gratification)  they would prefer. It’s up to you to decide what you think will work, but it’s nice to have the feedback from your customers. Tip: the customers who actually give feedback will probably be the first to join the program.  They will feel like they have been there contributing to the design of the program.

3. Pre-signups 

This is sort of like pre-ordering something before it hits the shelf.  Since you’re already asking customers if they would be interested in a program, why not also ask if they want their name on the list first? So when the program launches they will automatically be enrolled. Let them know that by doing a “pre-sign up” they will be notified about specifics first. Plus, they will be the first to receive the benefits. This will create a sense of exclusivity and excitement. Since these people have already mentioned their interest in your referral program, they will produce great referrals.

4. Referral Program Trial 

Great, so you have preemptively gauged to see if your existing customers would be interested in a referral program. And you already have some people that want to be signed up. Now all you have to do is set up a trial period to test and see how well your customers actually respond to the program.

By doing this pre-launch of the program you can work out any issues that may occur. So that when it’s launched it will be smooth sailing. Here’s how you can do it.  Run your program for a set amount of time,  nothing too short or too long.  Perhaps a month or so and see how many people have joined and how many referrals led to successful business. Remember this trial period is helpful for working out the kinks. If people are not showing much engagement you can think about what aspects of the program need to be changed. Is the incentive good? What about is it being promoted effectively? Is the process of signing up easy? Does it look nice? Is it attention-grabbing?

do a trial referral program

5. Promote the program 

Just like you promote your referral program after it’s launched – you need to promote before it’s launched. You need to promote your referral program if you want to see success.

There are a ton of ways to do this. You have to get people amped to take part (like how stores advertise future sales). This is almost like planting the seed in your customer’s head. You are giving them something to look forward to. Try using countdowns and reminder emails to get the crowd excited.

Don’t hide your referral program. If you want people to join, it needs to be seen – this is important for promoting pre and post-launch! See how Ibotta used a countdown to gain excitement for their new referral program? look at all those “Likes”.

promote your referral program

Do Referral Programs Work?

The short answer is, yes! Like everything else in life that grows, you need to do a little bit of nurturing in order to have a well-developed program. A little bit of elbow grease can lead to bountiful success.

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Posted by Megan Mosley

Megan Mosley is a writer for Referral Rock. You can find her poking around online or tweeting about marketing, small businesses, SEO, or even sharing funny memes. She is addicted to coffee and uses it as a fuel to keep her going through the day.