How to create a successful refer-a-friend program? Like all good marketing strategies, you need to do a little research in the beginning. It’s likely you’ve already been exploring other successful referral programs, which is a great way to get some ideas for your own program.
Today, we’ll cover 10 refer-a-friend best practices for designing, running, and promoting a referral program:
There are plenty of statistics that show why customer referral programs are so effective. Here are a few popular ones:
- 84% of people trust recommendations from people they know more than any other form of marketing.
- People are 4 times more likely to buy something from a business when they are referred by a friend.
- Referral programs bring in loyal customers who stay with a business for longer periods of time.
- One Wharton study reports that referred customers are 18% more likely to stay than other customers.
Sounds nice, right? While referral marketing programs have a lot of moving components, running a successful program doesn’t have to be hard. Let’s dig into some refer-a-friend best practices and tips below:
Referral program marketing
Refer-a-friend marketing, or referral marketing, uses the influence of existing customers to attract new business.
Referrals work because people tend to trust recommendations from someone they know. Based on this trust, refer-a-friend programs help to spread the word about a particular business, product, or service.
Refer-a-friend marketing makes use of programs in order to track and account for every referral. Essentially, referral programs are an organized way for customers to share a product or service with a friend, and to track the reward incentive process, as well.
Here are two of the most successful referral programs that show just how beneficial they can be to your business:
Tesla is making a lot of headlines these days, being a futuristic and forward-thinking company. This approach carries over to the brand’s referral program. It previously rewarded its customers by giving each Tesla owner a maximum of ten $1,000 discounts to give their friends, and by letting Tesla owners tour the company’s factory on a VIP invite. Each referral also gives customers a chance to win a free Model Y or Roadster.
In the last quarter of 2015, when Tesla ran the $1,000 promotion, 25% of their total sales came from their referral program. Currently, the brand’s customer satisfaction rate stands at a staggering 97%, with most willing to purchase their next car from Tesla.
Evernote has made great strides since its launch in 2008. This note-taking app is currently valued at a massive $1 billion and has over 100 billion customers worldwide. With barely any other marketing efforts, their referral program is largely responsible for their growth and success. Customers earn 10 points for the first three referrals. This carries the value of an additional monthly upload of 3 GB, or three months of premium service. The referred friend gets a free month of premium service, as well.
We cover more referral program examples (including the famous Uber referral program) in our other articles. Browse through for any ideas, and apply them together with the following referral program best practices.
10 refer-a-friend best practices
There are a few things every business owner or marketer should do in order to have a successful referral program. Here are the top 10 refer-a-friend best practices to consider:
1. Know your customers
Obviously, this is a big one. If you know who your customers are, it’s easier to create a program that will excite them. Or even better, exceed their expectations. Knowing your customers will also help you provide a more personalized feel to your program. Get insight from your existing customers – after all, they will likely refer others with similar needs – and use this as a basis for your referral program. Creating a program with messaging and rewards specifically for them will let your customers know you really care.
2. Think about the reward
If you offer a reward your customers love, then your program is already on its way to success. Your reward should be something worth the time and effort your customers spend referring another person to your business. Ideally, it should also tie back to your business, such as store credit, an account upgrade, or swag.
The right rewards will show you appreciate their efforts. And when people can see their effort is appreciated, they will be motivated to work harder. Learn more about what referral rewards and incentives work best.
How to successfully use referral rewards
First, you need to decide who to reward. The best referral programs offer double-sided incentives, where both the existing customer and the new customer receive rewards.
Then, you can determine what reward will work best. It’s best to take some time thinking of the best incentive you can offer. The referral program reward may be the main reason people join the program, so make sure it’s something that customers actually want.
|If your product is…||Higher cost or purchased infrequently||Service or subscription-based||Low-cost or purchased frequently|
|Description||Big ticket items, such as cars, mattresses, or large kitchen appliances||Frequent or repeat purchases (i.e., streaming services, software tools)||Items that may vary, but are purchased repeatedly (i.e., food items, restaurants, clothes)|
|Consider these referral rewards||Cash, swag, gift cards, donations (rewards not tied to future purchases)||Store credit, points, free month, upgrade, swag, donations||Store credit, discount, gift cards, swag, donations|
Don’t forget to thank your customers
In addition to giving referral rewards, it’s important to let your customers know you appreciate them. If someone sends you a new referral, be sure to say thank you. After all, they’re helping you grow your customer base and contributing to your business success!
Referral programs are a great way to find your most loyal customers – the ones who really love your brand — so take the opportunity to build a long-term relationship with them. Even a small note of thanks goes a long way in staying connected with your customers. Plus, it may motivate them to refer again.
3. Consider who to invite
Who you invite to participate in your referral program plays a big part in its success, especially if you’re launching for the first time. So who should be invited to your referral program? Here are the main people to consider:
- Current customers (especially your most loyal ones)
- Past customers
- Social media followers
- Email subscribers
- Employee advocates
4. Look for places to promote
If your program isn’t easy to find, chances are there will be low participation. Make sure to promote your referral program where people (especially the ones you want to participate) can find it.
Keep in mind that referral program promotion is an ongoing process – you can’t just promote it once and expect it to take off. List down the best places to promote your refer-a-friend program and place it on platforms your customers and ideal participants frequent.
Then, use all of your resources to promote, promote, promote. Remember that social media, emails, newsletters, your blog, website pages, and even phone calls can be a great place to promote.
Try these helpful promotion ideas
- Use emails: Any email you send your customer can be used as a referral program invite. Transaction emails are especially effective, as they tend to be opened more often. Include your referral program in customer emails, along with a clear call to action (CTA) that links to your referral program.
- Add a link in your social media profiles: Social media bios are an easy way to drive people to your referral program’s landing page. Most new followers or referrals will check a brand’s bio, while existing followers will be able to easily navigate to the page whenever they need.
- Make it visible on your website: Treat your referral program like any other marketing campaign, and include some information about it on your home page. It doesn’t need to be over-the-top to be effective – some businesses add a link to their footer, while others prefer including it in their main menu. As long as customers can see or find your referral program link, they will be able to start sharing with others.
- Add it to their customer portal: Perhaps you don’t want a referral link on your menu. Or, your program is exclusively for paying customers. If this is the case, consider adding the referral program link on the customer’s dashboard instead.
- Try retargeting ads: Sometimes, people just need to be reminded of your referral program. If you notice referral signups starting to taper off after a while, a few retargeting ads could be all it takes to jumpstart your program again.
- Use pop-ups on your website: Are you currently using pop-ups to engage with visitors to your site? If so, why not use them to promote your program? For example, if someone is about to close your browser tab, an exit pop-up can help effectively promote your refer-a-friend program. Or, once someone has finished checkout, a pop-up can quickly introduce the referral program to your new customer.
- Surveys: Use surveys, polls, or questionnaires to lead interested parties to your referral program. For example, if you run an NPS survey and see someone gives you good feedback, it’s a great opportunity to direct them to your program.
- Work towards a promotional goal: Yes, one of the main goals of referral programs is to bring in more customers. But it’s always good to have specific (and realistic!) goals to work toward and be able to measure your progress. Keeping track of how far along you are allows you to see what works and what doesn’t.
5. Make use of referral program emails
There are a few key emails sent out during every referral program. These emails go to either the existing customer (the referrer) or the potential new customer (the referred friend).
Emails to the existing customer
To start your referral program, you’ll be emailing your existing customers, usually after certain events (i.e., after purchase, when shipment has been made). Consider this as your initial invite email asking for referrals.
Here are five things you can do to make sure the refer-a-friend email you send to existing customers is successful.
- Make sure your subject line is clear and grabs attention
- Keep the email simple (add the details and information on your landing page or referral program FAQ)
- Make sure your email’s CTA does its job – drive people to learn more or start referring others.
- Include the main benefit or reason why a customer should join
- Be sure you catch them at the right time – when they are happiest.
After this initial invite email, you’re likely to also send participants a registration email and other reminder emails. Reminder emails include updates on recently sent referrals or general updates about the program, which also work to boost engagement.
Emails to the referred friend (new customer)
There are also a few emails sent to the potential new customer, once they’ve been referred by an existing customer. The first email starts by inviting the friend to make a purchase, and is actually sent from the existing customer. You can create a pre-filled message that represents both you and your customer, which can help make sharing even easier. Of course, you should also allow customers to edit or personalize this message before sending.
Another email often sent to new customers is a thank you message after they make their first purchase. (In addition, you can also send an email to the referring customer to let them know they have received a reward.) Here are many more refer-a-friend email ideas and templates to draw inspiration from.
6. Act quickly to engage customers
With the attention span of the average person being a scant eight seconds, it’s best to offer engaged customers an incentive for referring friends as quickly as possible. Look for times when promoting your referral program will make the most impact, with the most efficient speed.
For example, you can send an email right after someone makes a purchase (when they’re highly engaged), asking them to refer-a-friend in exchange for an attractive reward. Or, even faster, you can launch a referral program pop-up immediately after the customer checks out.
If you send surveys or questionnaires to your customers, and you identify some key customer as prime promoters, you can also directly invite them to participate in your refer-a-friend program.
7. Make sharing easy
If your referral program is easy to share, then people will end up sharing it with their friends. Since every referral has the potential to become a new customers, it’s crucial to make the process of referring as easy as possible. Here are some ways to make sure your referral program is easy for your customers:
- Provide multiple options to share on the platforms they use most, like Facebook, Instagram, SMS, and email.
- Create easy-to-share referral links that customers can immediately copy and paste (even better if they can just tap the link, instead of having to highlight the whole line)
- Optimize your program for mobile so people can quickly share on-the-go
8. Don’t be shy to follow up
These days, we’re used to getting reminders – for appointments, meetings, scheduled deliveries, and more. Why not send a reminder to follow up with customers? Some may have already signed up to the referral program, but simply forgotten about it. Send them a quick reminder. Let them know the program – and all its rewards – are still there.
Your follow-up message can be simple. Something like “Hope you’re enjoying our referral program” or “We’re excited to meet your friends” can be enough to remind them to refer their friends.
9. Check out what your competition is doing
It never hurts to do a little competitive research. You may have already scoped out your competition to see how their products and services fare against yours. Do the same with their referral program.
Check out a few of the most popular ones, note what you like and don’t like, and use this info to craft your own refer-a-friend program. If a certain program structure or reward structure are working for them, it may work for you, too. On the other hand, if you find any holes in their program, you can also use these to your advantage. Looking at the existing programs being offered is a good way to get a leg up in creating the most effective referral program for your business.
10. Use customer referral program software
Software is made to make your life easier. The right software tools can make word-of-mouth marketing easier, too!
Referral marketing software allows you to track the number of referrals coming in, track who these referrals are coming from, and help you distribute rewards. Plus, software can also automatically generate referral links that make it easier for customers to share your program across email and social media. All this automation makes sharing just a click away, while tracking allows you to refine your referral program.
Looking for the easiest way to start a referral program?
There are a ton of different software options out there to help with refer-a-friend programs. In fact, here is a list of the top refer-a-friend platforms available. Choosing the right platform can be difficult, as there are so many details to consider.
You need to think about how you want your program to operate before you set out on your quest to find the perfect software.
After you get the general idea of what you want to do, you can shop around. Luckily, there are a few refer-a-friend platforms that offer a demo and/or free trial. We’d recommend scheduling a demo, just to see if the software is going to be able to do exactly what you want it to. Then if you are intrigued, testing the software should be your next step.
Here are some things you might want to consider:
- Ease of setup/maintenance
- Free trial
- Clean user interface
- Ease of use for customers
Referral marketing widget
Most software will allow you to display the program in a variety of ways. A popular and convenient option is the refer-a-friend widget. This is a great way to get customers signed up for your referral program, without making them jump through hoops to do so.
The cool thing about a refer-a-friend widget is that it can be used as a pop-up. This way you can decide when a customer should sign up. One helpful tip is, do this when the customer is most happy.
For example, some e-commerce sites have a pop up refer-a-friend widget right after a customer makes a purchase. The trick is to refrain from having too many pop-ups as a customer will likely ignore them if too many occur during one session.
Referral program ideas
Building an online marketing presence should be a top priority for both well-established and new businesses. Most customers are comfortable to recommend and share their experiences on their social networks. You just need the right referral program ideas to help you kick off a successful program. Check out our resources below:
There are many well-made referral programs out there.
- We break down 25 of the best referral programs to help you design your own.
- We also showcase over 35 design inspirations for referral program emails.
Need more inspiration for your referral program?
- Here’s some top-notch refer-a-friend campaign ideas.
- Check out best practices for referral marketing on social media.
- With an amazing refer-a-friend message, you have the potential to unlock a ton of referrals. Learn how to choose one.
- Find out how to write a referral call to action that motivates customers to refer.
Word-of-mouth is vital to any marketing strategy. If you are already providing a great product, stellar service and awesome support, customers are probably already talking about you. Creating a referral program will let you harness this word of mouth to easily generate new customers.
Think of your customers, the reward, and how you promote. These are your key players when designing a top-notch referral program. Obviously, the rest of your program design is important, but these three points can make or break you.
Following the referral program best practices we outlined above will set your program up for success, because they help make it easy for your customers to refer. Be sure to reward customers for referring their friends, promote your program, and make it efficient for customers to refer their friends. Referral software will make promotion, rewarding, and tracking easy.