Customer Referral Program: The 5 point checklist
Getting a customer is no easy task. All of us can vouch for that. A lot of time, resource, and planning goes into building a strategy that will help a business acquire customers. But wait, that probably is only one side of the picture. Do invest in getting more customers, but in the longer run, invest to build a customer base that gets more leads and referrals. In today’s world, it has only become imperative. This is where customer referral program comes into play.
Referral marketing is a method of promoting products or services to the new customer through referrals. While some customers could be good Samaritans and refer you themselves, others might need a little extra push. This could mean an effort on your side to actually ask for a referral or incentivising them to share the referral.
If you’re planning to run a referral program, make sure you refer to this 5 point checklist.
Identify your advocates:
Not every customer is going to be exceptionally happy with you. No matter how amazing your services, there will always be a group of customers either disgruntled with you or just satisfied. Neither of these groups is going to be gaga about your business. What ought to be done here is identify the group who will. These could be the customers with highest purchase values, most repeat transaction history, or the ones who rate you highly or whatever metric deems fit to your business. To know more about how to build brand advocacy through customers, click here.
List the possible communication channels:
Once you’ve figured out the customers who are more prone to talk about your services, find a suitable channel to communicate with them. It is always advisable to adopt a multi-channel approach for better recall. Customers these days are present across channels using multiple devices.
For any referral program to be effective, one needs to go beyond email marketing or single channel communication. Ensure that all your communication clearly states the intent and has a clear call to action. In absence of either of these, regardless of the amount spent in the campaign, results will go down the drain.
Incentivise the parties
As discussed, not all customers are going to refer you out of the good of their heart. Some customers may need that extra little push. The referrer and the referee, both deserve an incentive – the referrer, for making an effort and the referee, for joining the business. One of the more popular incentives is offering x% discount to the referrer & referee when the referee takes the desired action
Adding to that, incentives need not always be monetary. It is a fact that doing good things for someone else gives the giver greater happiness than just doing it for self-gain. A study by the University of Chicago points that in context of referral marketing, non-cash incentives are 24% more effective at boosting performance than cash incentive.
Execute the program
Like loyalty plans, referral programs also need to be simple, quick, and easy. Try garnishing your referral program with a dash of complexity, and you stand a chance to lose not just the referee but also the referrer.
Set up tracking
Irrespective of the size of your organization, when you implement a referral program, never do so without setting up an analytic and tracking mechanism. You don’t want to miss a single detail, do you? Here are a few things you would want to track:
- Who referred whom
- When were they referred
- Did the referral result in any conversion? If yes, how much [quantify the result]
Perhaps this is the moment when you should think of investing in a CRM system. And by CRM, I mean not just a software but an all-encompassing comprehensive strategy. Click here to know more.
Well, I think that’s a tiny but effective checklist you would want to take a quick look while rolling out your next referral program. Good luck with the campaigns. Should you need any assistance or consultation, feel free to reach to Jacobsons Direct.