There
comes a time when every business will weigh the pros and cons of creating a
referral program, whether it is online, in store or both. Once they’ve made the
decision to create one, or jazz up an existing program, it becomes necessary to
make it as effective as possible. The way to ensure your happy customers will
refer your business is to make it worth their while to do so! This is where
offering rewards kicks in. Take a look at your referral program and ask, “Is
this creating a win-win situation for both me and my customers?” If the answer
is “No” or “I’m not sure”, try following some of these tips to ensure you get
the best results.
Make
it Valuable
If
there is no apparent value in your offers, no one is going to take part. Your
offers should be something that makes referring others worth the time and
effort it takes, not just a pat on the back. By offering rewards of some
substance you increase referral likelihood, and show your customers that you
value them.
Provide
Options
Offer
a variety of reward options, double sided rewards, or change your options
throughout the year. This not only increases the chances that more customers
will be interested, but it will also encourage them to refer more often. If
they make referring a regular occurrence, their brand advocacy will
continuously increase in value. Take a look at what these companies offer in
their referral programs:
• Growth Hacker TV grants 25% off
your monthly subscription for every active member you refer (after four
referrals your subscription is free). They also give 25%/month off to your
referrals.
• Spotify
rewards users with a free month of their premium service for every 5 friends
that register.
• ShortStack pays 30% commission on
every sale generated through individualized links.
• SpiderOak offers 1 GB of free space
for you and your referral with every sign up (up to 10GB free).
• Media
Temple will give you credit equal to the first month of your referral’s
chosen plan, and they get 20% off.
Why
not tailor your rewards to your target audience’s wants? For example, Roku,
makers of streaming players, offered a free month’s subscription to Netflix.
Or, you could try tailoring it to the season; since we are in the middle of
winter you could offer lift tickets to specific ski hills. Or, in the spirit of
the holidays, you could make monetary donations to a charity. What ever you
choose to offer as a reward, make sure it’s valuable to your clients but
doesn’t outweigh the profit you will make on new customers.
Remember
to Give Thanks
Create
a general thank you email that you can personalize for every referrer. Show
your appreciation for them bringing in new business. People like to be valued
every step of the way, so give thanks for every referral, not just the ones
resulting in a sale.
Why
Bother?
Referral
programs and rewards go hand-in-hand for a reason; they work. 65% of new
business comes from referrals, and by implementing rewards into your referral
program you can keep current customers interested and engaged, all the while
bringing in a surplus of new capital. If you’re still not convinced, take a
look at the results Dropbox
saw following their referral program. By giving away additional storage space
to both referrers and referrals, signups increased by 60%, and within 15 months
they had increased the amount of registered users from 100,000 to 4,000,000!
Satisfied
customers may already be spreading the word about your business to their very
close friends and family in casual conversation, but by creating a referral
program and chalking it full of rewards, you can drastically increase the
amount of successful referrals. As the saying goes: give and you shall receive!