Marketing Tip: Customer Referral Program
Strategy
Boost revenue by creating a formal customer referral program to incentivize happy customers to refer your business, products and services.
Why it matters
Referral marketing is a powerful way to grow your business. How powerful? Consider the following:
- 1 in 3 people come to a brand through a recommendation, and customers who were referred by loyal customers have a 37% higher retention rate. (Deloitte)
- Word of mouth is the primary factor behind 20-50% of all purchasing decisions, especially when considering a first time buy. (McKinsey)
- A referred customer is 18% more likely to stay with a company over time than the average customer (Wharton School of Business).
Tips for successful referral programs
Promote. Promote. Promote.
If your customers don’t know about your referral program they can’t participate. Keeping your program highly visible and frequently reminding your customers about it will increase results. Consider making your referral program available in your marketing efforts such as:
- Social media
- Email signatures / Auto email templates
- Box / packages stuffers
- Business card
- Flyers
- Thank you cards
- Special referral cards that your customers can distribute
Double Reward
To make the most of referral opportunities you will need to provide an incentive to both your referring customer and the referred customer. Why? First, you need to offer an attractive incentive to motivate your customers so they turn into referral machines. Consider budgeting for incentives such as Starbucks gift cards, retail gift cards, in-store / webstore credit, and special discounts.
Next, you need to attract the referred customer with an exceptional value. Otherwise, you don’t complete the referral lifecycle and convert on the opportunity.
Takeaway
Customer referral programs provide incredible results when properly developed and executed. Consistency and a dedication to active promotion will ensure the best possible results.
