Tips for Creating a Customer Referral Program

Most experienced marketers would readily admit that word-of-mouth marketing is the most powerful form of marketing. Nothing compels a customer more than a recommendation from a friend or a family member. This is the reason why most successful marketing campaigns involve a hefty amount of word-of-mouth marketing. Some businesses are entirely built upon word-of-mouth, such as Uber, AirBnb, and Dropbox.

customer referral program

Marketing consulting agencies such as Primal encourage all businesses to include a customer referral program in overall strategy to drive word-of-mouth marketing.

For some B2B businesses, this type of marketing is much more important than advertising or even social media engagement. Many B2C companies find success largely thanks to great customer referral programs. Some business models are built entirely upon customer referral, such as social games like Farmville and Candy Crush Saga. If you want to create a customer referral program for your business that really converts, here are several tips:

Offer Incentives Customers Actually Want

Make sure the incentives you provide for customers for spreading the world about your brand is actually meaningful. Choose incentives depending on the nature of your business and the target audience. For example, consider Dropbox. The cloud storage company offered customers 500MB of free storage space for getting a friend to join the service. This is an excellent incentive that is right on par with what the company offers. Your business, too, should offer similar incentives that can be actually of use to customers. Incentives can take the form of discounts, upgrades, or free stuff. But the customers must really want these things.

Incentives Should Result in a Lead

Don’t offer incentives for social media mentions or shares. The incentive the referral program offers must result in a lead. The Dropbox example provided above shows that customers got their reward once a friend signed up. That’s a direct way to generate leads. Your business should take a similar approach. Incentives must result in a lead and a conversion; otherwise the program will not have the intended impact.

Make Referring Easy

The process of referring the brand to another should be made as easy as possible. Make it easy to sign up or make the referral. There shouldn’t be unnecessary hurdles in the way of a customer making a referral. If the process is complicated, customers simply won’t bother with it. So take extra time to make sure the referral process is as easy as possible to do.

Timing for the Program is Important

There’s an actual ideal time to launch a referral program. Customers will not always be in the mood to recommend your company to another. Typically, referral programs should be launched when customers are most engaged. That is sometime soon after a customer signs up or starts shopping. It’s important that you offer the incentive when the customer is most engaged and is happy with the services provided. Otherwise, it simply won’t happen.

Do Not Overburden Customers

Never overburden customers with endless requests to make recommendations for family or friends. It will likely result in alienating the customer or perhaps annoying him or her. The incentive program should be a onetime deal. If the customer wants to make references to more than one person, offer incentives for that too, but don’t force the hand.

The above suggestions should result in creating a highly effective customer referral program. Keep in mind to tailor make your program to suit the business needs as well as target audience preferences.