90% of consumers trust in companies and services recommended by friends, relatives or people they know. Only 33% trust ads (Nielsen).
Refer-a-friend campaigns help brand’s gain trust since the referrers have already tested the product or service before referring them to their friends. This places refer-a-friend campaigns among the top of the most effective marketing strategies.
Market Force estimates that friends influence 81% of online consumers in the United States in making purchase decisions.
A joint study by Ogilvy/Google/TNS approximates 74% of consumers depend on mouth-to-mouth as the primary influence of their purchase decision. McKinsey further suggests word of mouth primarily influences 20 to 50 percent of consumers’ purchasing decisions.
The statistics point out the importance of why having a good refer-a-friend campaign is vital in buyer’s purchasing decisions for your business. We’ve explored some of the best refer a friend campaign ideas so you don’t have to. You’ll see how they can be a game-changer for your business.
Market Your Refer-a-Friend Campaign (Blast)
We’re going to start with the basics, but please don’t exit this article just yet. Having a refer a friend program and marketing it is how to get your campaign started.
Having an effective refer a friend campaign idea is not enough. You’ll need to market your referral program across many customers to make it known. To simply put it, be proactive, you’ll need to blast your refer-a-friend campaign as if you held a megaphone.
You cannot expect your customers to participate in your refer a friend campaigns unless they’re aware of it. You need to promote your campaigns actively to ensure that your customers are fully aware of the benefits they can avail through the participation in your campaigns.
If you are already providing a great service and awesome support, customers are probably already talking about you. If you tap into this word of mouth and implement a referral program strategy using your support channel, you have the potential to unlock a ton of referrals.
You can promote your campaigns via social media, emails, SMS and other platforms. Alternatively, brochures given to staff members to issue out to customers who visit your brick and mortar business can serve the same task. The point is, make the campaign known to as many customers as possible.
There are many well-made referral programs software out there. Here’s some top-notch refer a friend program ideas and examples you can learn from, as far as creative thinking goes.
However, let’s get into some effective campaign approach:
1. Social Gifting Concept
Social gifting is highly effective ‘refer a friend’ campaign idea. This is because your customers can truly show they care by providing benefits and a new product or business to their friends (a one-sided reward incentive).
In this campaign, the member does not get rewarded at all but the referred friend or the new customer gets all the benefits. If your customers feel that your product is really good and it is worthy of sharing with a friend, they will participate actively in the ‘social gifting’ campaign.
An example of a company that uses this model is a subscription based or in some cases eCommerce. Think of when you’ve seen a $50 gift card with a minimum purchase of $150. Why would anyone refer without receiving any reward? Well, this reward concept is based on someone who wants to share their experience with others, or a simply share a reward that is too great to not share with your friends. It could also be used to display a small token of appreciation to their friends, maybe limiting the quantity of these social gift distribution can help increase its significant.
This idea is a win-win for your business. Essentially, it’s the same as a discount code and a friends & family (F&F) discount offer. Give a big discount offer, however, take into consideration your average LTV and your margins to see what this incentive might be worth both for you and for referred customers.
The only issue with providing a steep discount in the beginning would be that they will always expect that type of discount. Providing an expiration date or incentivizing them to offer the same social gift to their friends and family can help increase more referrals and more opportunities for LTV increase.
2. Charity Donation Rewards
Not a lot of explaining needed with this type of reward. This technique serves the customers who are more motivated to donate to charities. The customers refer their friends who share a common interest of giving to charities. For example, donating on behalf of the customer or referred lead by assisting the Red Cross.
It doesn’t take too much effort for your members to share your program and both your member and their friends can contribute to the cause or charity.
3. Use Mystery Gifts as Rewards
Specific gifts are often the smart idea, but mystery rewards elicit excitement and anticipation. The customers who refer their friends will receive this mystery gift, and that makes the trend spread.
This idea, however, depends on your customers. The approach gives you the freedom to choose a wide range of gifts to reward customers. Some companies like Amazon, eBay have used this idea, and it has worked out well for them.
Obviously, setting expectations and the element of surprise needs to be backed up with something of that caliber. You’ll want to create that “I just received X, what did you get?” conversation going around to spark that next “I wonder what I’ll get” conversation to storm your business.
4. Subscription Credit
You can incentivize your customers with subscription or store credit for referring your products to their friends. It does not cost you much, as the credit can only be used to buy your products. It’s only the cost of the product that you lose out on but the customer feels happy about saving money on the purchase (and will likely pay for the following subscription fees).
These campaigns are particularly effective for selling software, courses, ebooks or other digital products. It might not even cost you a single penny (if you’re providing a free service or product anyway) but your customers get a lot of value for free, meaning they will happily refer your products to their friends.
Something to try:
Offer heavy discounts on your eCommerce shop and encourage customers to participate actively in your referral program. You can create tiered structure and offer discounts based on the number of referrals.
5. Reward With An Upgraded Service Or Product
By upgrading the services your customers are using already, you will win the loyalty of your customers. For instance, if one of your customers is using a SaaS tool, you can upgrade them to the premium tier when they refer your product to a friend. It won’t cost you anything extra, but you will get a new customer and keep your existing customers happy (and referring).
6. Recurring Benefits
Even if your loyal customers forget you, you should never forget them. Once your customer hits a certain target set by you, offer them benefits that they get to enjoy each month. For example, if a customer brings ten new customers in a month, you can offer them discounts or deals over upcoming months.
7. Exclusive Membership Programs
Going a step above by offering a tiered based reward. You can create special clubs for the customers who bring the maximum number of new customers for you. Offer them exclusive benefits that are available only to the club members. With a gym membership, for instance, this can include personal training credits, gift shop credits, or specialty items like a eucalyptus-infused towel every visit.
Even with a SaaS tool, you can upgrade your members to a higher tiered plan at no extra cost with dedicated customer support for your members VIP experience.
Being part of an exclusive program can grow as your referral program grows. You can create the top 5, top 10, top 50 member exclusive programs to spice up your members to get excited about the next reward type they can enjoy as a member.
8. Referral Contests
Referral contests also encourage a lot of customers to participate actively in your campaign and are a great idea driving customers to the brand. Offer a product which is high in demand for the winner of the contest. The product can be an expensive smartphone or tickets to an upcoming show or concert, depending on the demographics of your customers.
Offer something nice for the runner-up and the second runner-up as well. While some customers might not be able to get the big reward, providing gift cards to the mass or top 20-100 of your members who referred a specified amount of friends can be a great way to encourage referrals. Also, offer discounts or other benefits that don’t cost you anything to other participants.
A contest can create an entire army of customers who will work for you and bring new customers.
Bonus: Giving entries for shares in social media widens the campaign, and more people can learn of the programs as customers share to their friends in their social sites. The drive is suitable for cementing loyalty, if you want more people to participate in your refer-a-friend campaign, simply have them share with their networks and reward those who provided the most shares.
A refer-a-friend campaign is among the most effective of marketing tools. It is advisable to choose an idea that is desirable and discoverable. The campaign is a selling point and a way for new customers to join your brand. Making your refer-a-friend program discoverable, having a great landing page, and retargeting customers who visit the page and do not refer friends by giving more than another opportunity generates more referrals later.
As you can see, most of these ideas can be scalable and grow with your business. The more referrals you receive, the more ideas you can implement to reach to the next level.