However, there are great ways to start your referral program and plenty of not-so-great ways. Let\u2019s talk about some of the aspects you should consider when encouraging your customers to start referring.<\/p>\n
1. Do other people have a reason to refer your company?<\/h2>\n
No matter how substantial the incentive is, if people don\u2019t like your products or services, they\u2019re not going to feel comfortable referring it to people they trust and care about.<\/p>\n
Some companies make the mistake of thinking that a large incentive will be enough for people to begin telling everyone they know about the app, brand, or products. Unfortunately, that\u2019s not where powerful referrals come from. They come from customers that genuinely want to recommend your business.<\/p>\n
Take a look at your online reviews to understand what kind of relationships you have with your current customers before you begin any type of referral program.<\/p>\n
On social media, roughly 71% of consumers who have had a positive experience with a brand<\/a> are likely to recommend it to their friends and family. Make sure they have enough of these positive experiences to share before you launch into an incentivized referral program.<\/p>\n Let\u2019s examine some reasons (beyond incentives) why people might want to refer your company:<\/p>\n Now that you\u2019ve thought a little bit about why your consumers would even want to refer your business in the first place, it\u2019s time to take a deeper look at the referral program you either have or want to implement.<\/p>\n Although a large majority of pleased customers (83%) of consumers are willing to refer a brand<\/a> after a positive experience (beyond social media), only about 29% will actually do so on their own.<\/p>\n Why?\u00a0It takes effort, and most people are unlikely to take the time and energy to refer a company unless it has really surpassed their expectations. Therefore, if you really want your referral program to have a positive impact, you need to make it as simple to use as possible. Every consumer should be able to figure out how to join and participate without tons of money or a super complex process.<\/p>\n For instance, take a look at Discover\u2019s credit card referral program.<\/p>\n If you send one of your friends or family members a referral with a link to apply for a card, and they get approved, both of you get a statement credit of $50 or more. It takes very little time, and if the person who the customer referred doesn\u2019t take advantage of the opportunity, it\u2019s no sweat off the current customer\u2019s back.<\/p>\n Let\u2019s say you do have a more complicated referral program. Then, the reward needs to grow in size in correspondence with the amount of effort your users are putting in. Let\u2019s take a look at Tesla\u2019s referral system.<\/p>\n Obviously, a Tesla vehicle is no small purchase or easy recommendation, and certainly not a commitment that any consumer would take lightly. Therefore, their high-stakes referral program has some bigger rewards than other companies.<\/p>\n If anyone uses your referral link to purchase a new Tesla car, the person who referred them gets 1,000 miles of free Supercharging, as does the person who was referred. Additionally, the person who referred gets the chance to win a Founders Series Model Y or a Roadster supercar.<\/p>\n Although Tesla and Discover certainly have very different referral programs in terms of incentives and products, they both have one thing in common: they\u2019re easy to understand. Your referral program needs to be equally as simple (if not more so) to entice customers.<\/p>\n Both of the examples we just discussed don\u2019t really revolve around social media. What about the many referral programs you see where people Tweet a link from a brand they like, or encourage you to like a Facebook page so they can benefit?<\/p>\n Social-media-based referral programs play on the fact that 81% of American consumers\u2019 purchase decisions are now influenced by their friends\u2019 social media posts<\/a>. To some extent, referral programs and social media marketing go hand in hand.<\/p>\n Not only do these kinds of referral programs get your brand\u2019s name more attention, but they can also be a key part of how to build a massive following on Instagram<\/a> or any other social network. It will draw more people to your brand\u2019s profiles, therefore building your follower numbers.<\/p>\n However, if you\u2019re going to reward customers for simply Tweeting a link or posting something on their Instagram story, you need to have a method for tracking these referrals. Additionally, you\u2019ll need to have a team monitoring increased traffic and determining if social media shares have something to do with it.<\/p>\n Encouraging people to get your name out on social media is great, but if you don\u2019t have ways to tailor your marketing process around these referrals and measure their success, your referral program probably won\u2019t be as effective as it could be.<\/p>\n\n
2. Exactly how easy is your referral program?<\/h2>\n
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<\/p>\n3. How does your referral program incorporate social media?<\/h2>\n
In conclusion<\/h2>\n