Referral programs are the most influential form of advertising that attracts the best kind of customers – the type of customers that spend more, stay longer, and refer other friends.
92% of referred customers trust recommendations made by people they know and are 30% more likely to convert. Using a well-timed nudge and an easy way to get people to refer their friends, referral programs get a marketing message from person to person in the best way we know how – through word of mouth.
Founder of Referral Factory
Throw in a reward for customers that refer their friends and an incentive to encourage those friends to convert, and the results are fire – and the key reason why Fortune Business Insights says more companies are adopting referral marketing programs to gain the maximum number of customers.
If you haven’t already launched a referral program for your business, 2022 is the year to start. With 86% of businesses currently running referral programs see an increase in growth in just two years. We don’t need to tell you why you should have a referral campaign, we’re going to show you how.
If you want to grow your business, and experience that same kind of success, keep reading to see how to build a powerful referral program – a comprehensive guide.
Whether you have access to a team of developers to build your referral program from scratch or plan to use off-the-shelf referral software, find everything you need to know about referral marketing 101. We’re here to help you avoid common first-time mistakes or improve on previous referral campaigns that might not have performed the way you had hoped. Find a comprehensive guide on how to build a powerful referral program.
How To Plan A Referral Program?
The key to building a successful referral campaign starts with a clear plan. From setting goals and outlining the way it will work to the message that will get users to join the campaign and share it with their friends.
Setting Goals
Setting your goals and campaign objectives gives you a finish line to work towards. Whether you aim to grow your customer base, encourage newsletter subscriptions, boost entries into a competition, or even promote a new product launch. Setting clear goals will help determine a great referral campaign journey.
Plan How The Campaign Will Work
There are two ways a referral program can be structured, a single sided or double sided referral campaign. In a single sided campaign one participant in the referral process will get rewarded. In a double sided campaign, both the referrer and the person invited will get a reward. Clearly defined campaign goals will help determine how best your campaign should work and which of these two options will be best.
Think About The Message
How do you plan to position your referral program? What message will you use to motivate customers to refer their friends and what call to action will get referrals to convert into new customers? A strong message plays a major role in hooking customers into the campaign. One, to get existing customers to invite their friends, and two, to convince invited friends to join.
A Reward Or Incentive, What’s Best?
Choose a Single or Double sided Reward
Briefly touched on above, referral campaigns can be single sided offering one user a reward, or double sided, where both the referrer and the person referred will get a reward or incentive. There is no right or wrong referral campaign type to choose from, only the one that makes the most sense in helping you achieve your campaign goals.
The Difference Between a Reward and Incentive
Rewards are given as a “gift” to thank users for completing the desired action. Incentives motivate users to act in the desired way. Rewards and incentives can be almost anything you can think of including free products, gift cards, or even cash in the bank. But keep in mind your campaign goals set out in step one and try to align to these.
Decide What Your Reward or Incentive Be
Aim to issue a reward or incentive that makes commercial sense by benefiting your business. Think about things like coupons, account credits, and discounts. It’s always best to choose the type of rewards and incentives that drive customer behavior back into your business. It’s also a good time to consider how these will be issued? Dollar credits, percent discounts, coupon codes, and loyalty points may be easier to manage than bank deposits or free gifts for example.
What Are The Different Ways To Build A Referral Program?
Building a Referral Campaign in-house
If you are using your own developer, brief them on exactly how you want the campaign to work. Include how you want the campaign to work, who will be getting rewarded, and when. Your developer and designer will also need to have a clear brief on what the campaign must look like and at what point during the referral process should users be communicated with.
Using Referral Software
If you plan to use off-the-shelf referral software things get a bit earlier. After creating your account simply follow the steps mapped out in the campaign builder. You will have the option to create a campaign from scratch or the option to choose a pre-built referral program template. Style your referral campaign to make it look and feel on-brand. We’ve put together a list of the best referral software to help you choose.
How to Get Users Sharing Your Referral Program?
Talk to Your Customers on the Same Channels They Talk to You
Make it easy for your customer to refer their friends on the channels on which they are already engaged. No one knows your customers better than you do. You already know where they are talking to you, so it only makes sense to get your customers referring their friends on those same channels.
Offer a Variety of Sharing Options
The easier it is for people to refer their friends, the more friends they will invite. Make your referral campaign easy to share on preferred social media channels, email, instant messaging, or even in person. Also, think about offering different ways of sharing for example using referral links (these are most common) clickable buttons, or even QC codes.
How To Connect Customer Data To Your Referral Program?
Integrate Your Referral Campaign
Reduce your workload and eliminate the manual admin of managing your referral campaign by connecting it to your internal business systems. There are a number of one-click no-code integration apps to connect your referral campaign to your CRM, eCommerce store, or even an HR database.
Review API’ and JavaScript Options
API and JavaScript options will help to integrate your referral campaign with in-house business processes you use. More flexible integrations for more complex internal processes that will allow you to remotely manage new referrals and their status, referral tracking, and the issuing of rewards.
How Best To Launch A Referral Program?
Publish Your Campaign
After previewing your campaign, now it’s time to publish it. Because none of your customers will know just yet that your referral campaign is live, now it’s best to test. Use this time to check the mechanics of your referral campaign, quality check the messaging, and be certain it works as it should.
Share Your Referral Campaign with Customers
Encourage your customers to sign up for your referral campaign. Make it top of mind and really easy for them to join and start referring their friends.
How To Market Your Referral Campaign?
Tell Existing Customers about Your Referral Program
Market your referral campaign to active customers by promoting it in your newsletters, or by sending out announcement mailers. Create your customer’s referral links using your existing database and send these out via instant messaging, texts, or add them to electronic statements and invoices.
Target Inactive Customers
Use your referral campaign as a nudge encouraging inactive customers to return. Add a visitable button to your website, market on your social media channels, and send targeted messaging to historic customers databases.
What Software To Use To Track Your Referrals?
Monitor the Performance of Your Campaign
Keep an eye on how your referral campaign is performing. See who was referred by who. Where are most of your referrals coming from? If you have multiple campaigns running at the same time, see which are performing better and find out why?
Track and Reward Successful Referrals
Monitor successful referrals and consolidate referrals that have been converted. Don’t forget you will need to keep on top of issuing rewards and incentives (depending on the type of campaign) to users that have successfully referred their friends and users that have converted.
See SourceForge’s Top 15 Referral Software Picks for 2022.
- Referral Factory – Easy to use referral software – perfect for small to medium-sized businesses and marketers. You can build and launch your own referral program in under 5 minutes! Referral Factory offers over 1000 pre-built referral program templates you can use as your own, or you can build your own referral program from scratch. You get unlimited referral campaigns on all plans and brilliant support from their team of referral marketing experts.
- Influitive – allows you to build a community of advocates and invite your customers, developers, partners, and employees to complete challenges, referrals, product reviews, social media posts, and more. As they complete these personalized challenges—which can be targeted to groups or individuals—they automatically earn points, badges, and levels to redeem professional perks and privileges.
- Extole – Retailers, consumer brands, and financial services companies use Extole to turn customers into advocates. Our enterprise platform and a team of experts create engagement, advocate, and referral programs so that brands can harness the power of customer connection, sharing, and recommendations to grow their bottom line.
- Talon.One – is a powerful Promotion Engine that enables you to build targeted and customized marketing and sales promotions built around your customer and session data. Create, manage and track discounts, coupon codes, referrals, loyalty, and product bundles all in one holistic platform.
- Tapfiliate – Grow your business with Tapfiliate, an all-in-one cloud-based affiliate, referral, and influencer marketing platform. With over 30 plug-and-play integrations, Tapfiliate is an affiliate and referral tracking platform that allows businesses within the eCommerce and SaaS industries to create affiliate marketing programs that integrate seamlessly with any site.
- emfluence – The emfluence Marketing Platform is so intuitive, you’ll swear it was built just for you. We believe that usability is as important as functionality. That’s why we’ve focused the emfluence Marketing Platform’s features around what’s really important: helping digital marketers like you accomplish your goals every day.
- Tremendous – is the simplest way to distribute digital incentives and rewards globally. Use the Tremendous platform to instantly reward your recipients with gift cards, prepaid Visa® cards, cash, and more. We make it simple for companies big or small to buy, track, and manage incentives at scale.
- Zinrelo – is a modern-day, enterprise-grade loyalty rewards platform that enables businesses to launch a custom rewards program for their users.
- Kangaroo Rewards – Maximize customer relationships and not just transactions, with the Kangaroo Rewards loyalty marketing program. A completely white-label solution, enabling businesses to engage customers via personalized offers and rewards, automated marketing, referral marketing, digital gift cards, custom omnichannel experience, and branded app.
- Revetize – Manage your SMS Marketing, Customer Loyalty Program, Referral Program, & Online Reviews in one platform. Revetize consolidates more than 5 different customer marketing software into 1. (For the price of 1) Use our omnichannel drip campaign to send SMS, email, voicemail, and direct mail to your customers all in the same simple process.
- Go4Clients – Automate customer engagement with our Drips technology. Go4Clients latest Drips feature uses a combination of SMS, Voice, Email, and Mobile Landing Pages to interact with your customers. Map out the customer journey and let consumers flow down your sales funnel automatically. Trigger messages with different channels based on a user’s actions or no actions.
- Post Affiliate Pro – is the Most Reviewed and #1 Rated Affiliate Software. Manage multiple affiliate programs, track affiliate partner performance, assign commissions and issue payouts on one platform. It is a trusted affiliate software for tracking leads, clicks, and signups.
- Everflow – Want faster growth? Choose a Partner Marketing platform that goes beyond managing affiliates: Track every performance channel, integrate your tech stack, and drill down into what delivers ROI. Start driving more performance from affiliates, influencers, referral partners, and your media buying channels.
- Contactually – is a CRM and contact management software for real estate and small businesses. With Contactually, businesses can better capture, manage, and improve their professional relationships, ensuring growth. The platform lets users sync their email, phone, and communication history, keeping their entire network in one place.
- Birdeye – is an all-in-one Experience Marketing platform for multi-location businesses. More than 60,000 businesses of all sizes use Birdeye every day to be found online and chosen through listings, reviews, and referrals; be connected with leads and customers on the channels of their choice, and deliver the best customer experience with survey, ticketing, and insights tools.
In Summary
Successful referral campaigns are born from a great service or product offering and a community of happy customers. But asking your customers to refer their friends and making it easy for them to do so is really what gets referral marketing going. No matter how great your product or how well-loved your brand is, referral marketing campaigns are the only way to accelerate word of mouth referrals, see real customer growth, and a steady increase in revenue.
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