Referral Marketing

4 Pitfalls to Avoid in Your Referral Marketing Strategy

Developing an effective referral marketing strategy also requires knowing what not to do. Learn common referral program pitfalls and how to avoid them.

4 Pitfalls to Avoid in Your Referral Marketing Strategy

Getting people to give your business a referral is one of the best ways to increase awareness and boost revenue. Like any marketing effort, you'll want to make sure your referral marketing strategy is sound before investing resources. Here, we'll present four pitfalls to avoid before launching your referral marketing program.


1) Having A Bad Rep For Your Product Or Service

Just because people have the ability to share recommendations on social networking sites and by email and text doesn't mean they will benefit you. Of course, you want them speaking about you in a positive way.

Also, if you've repeatedly gotten bad press for your product or have not addressed a bad customer service experience, then slow down. Deal with issues like these before asking for referrals. Word-of-mouth is a very polarizing thing. While people are willing to share positive experiences, they are significantly more likely to share negative ones. 

Reaching out to customers who have had negative experiences is a geat way to gather feedback that can help to improve you business and product. Doing so can, and should, also allow you to address customers' concerns. Frequently, if you use their suggestions, these customers turn into brand ambassadors by communicating that you are truly committed to resolving issues.


2) Not Identifying Your Most Engaged Customers

Who are your best customers? If you don't know who is already engaged with your brand and why, then it may be hard to replicate that experience for other consumers.

Don't ignore the customers that would go out of their way to give you a great recommendation. Identify this group of individuals so they can champion your efforts to bring in more ambassadors and, ultimately, more revenue for your company. An easy way to identify your most loyal customers is by using a power map.

What if you don't have any customers? Maybe you're just starting out. If you have very few or no customers, you may need to rely on your own network to be your advocates. This is a great way of leveraging the credibility of your friends, family, and colleagues to reach businesses that will be a good match for your offering.


3) Not Planning For Response Management

After years of debating and planning, the health care exchange went live. Millions of people logged onto the system to explore their options for health care. There's no need to imagine the dismay and disappointment of site visitors when they couldn't actually start--let alone complete--the process.

The lesson: You should plan and prepare your referral marketing strategy for the number of customers that you expect to draw from your campaign. There may not be as large of an influx as the new healthcare exchange, but you still need to make sure you have the ability to respond to customers in an easy and efficient way.


4) Having A Product (or Company) That People Don't Have A Public Affinity For

Be realistic about how excited your customers (and non-customers) will be about what you're selling. There are some products or services that people may not want to share publicly.

It may be cool and quirky to “Like” the page of your favorite font on Facebook, but it may not be a product that people could effectively become an ambassador for. Some products may be too personal, others may simply not be stirring enough to have a successful referral program. While plastic pill boxes are not necessarily embarrassing, is it really exciting enough to generate a following of raving fans?

While these four issues are important, by no means do they represent an exhaustive list of everything to consider when developing your referral marketing strategy. Before you put your reputation, as well as the reputation of your ambassadors, on the line be sure to think through of any possible hurdles that could derail your efforts.

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