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Developing a Referral Marketing Strategy for Existing Customers

Referral marketing isn’t just about using your existing customers to gain new leads. With a well-built incentive program, you can actually increase brand loyalty among existing customers while simultaneously growing your customer base through referral traffic. That’s a win-win for you.

So, how do you make it a win-win for your existing customers? As we’ve noted before, referrals can't be a thankless job, which is why the details of your incentive or rewards program are fundamental to the success of your strategy.

With 74% of consumers identifying word-of-mouth as a key influencer in purchasing decisions and 92% of people ages 18 to 34 saying that they seek recommendations from friends and family before making a purchase, referral marketing is an integral component of today’s marketplace, and one that can yield impressive results if the right tactics are employed.

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But if your company is new to referral marketing, how do you develop a program from scratch? How do you harness the power of your existing customers and turn them into your most vocal fans? How do you ensure that your program optimizes for new leads and brand loyalty, all while remaining manageable and measurable?

Here’s how to get started:

Determine what motivates your customers and create incentives around those factors.

In some cases, existing customers will spread the word about your products and services to their friends, family, and social networks simply because they love them that much. In reality, however, this isn’t the norm, no matter how jazzed they are about your brand. People are often reluctant to give up space on their personal platforms to brands or companies—it’s all about image, after all, and we each painstakingly craft one whether we know it or not. That’s why providing the right incentives for customers is so important—it gets them over that hurdle. A good incentive will provide some type of desirable reward for your existing customers while also equipping them to share an incentive with others. Consider what motivates people to buy your brand in the first place, and design a program that speaks to what customers really want.


Identify additional ways to make your top customers feel rewarded.

Not every incentive has to be directly linked to referrals. For example, are there ways that you can reward customers who make X or more purchases within a given timeframe? Offering free shipping, doubling rewards points, or providing additional discounts for your most loyal and enthusiastic customers is a great way to energize true word-of-mouth referrals.


Plan to actively analyze campaign data and new leads.

Collecting and analyzing data from customer referrals is critical for optimizing future rollouts and campaign iterations. You’re planning to enable your customers to share your brand with others, and in return, they’re going to enable you to better understand consumer behavior surrounding your products and services. The more you understand about your customer base and the leads they generate, the more efficiently you can hone marketing strategies, gain customer insight, and grow revenue. Don’t let this data slip away without tapping into its full potential. Before you launch a program, decide how you will collect, store, and examine the intel and data points you retrieve.


Streamline structure and logistics with referral marketing technology

For your referral marketing program to be successful, it needs structure and commitment from within your company. It’s a smart idea to view referral programs as an investment, given that you want using the program to be an enjoyable touchpoint for existing and future customers. And from an operational standpoint, you don’t want managing the program to sap staff resources. For this reason, many brands choose automated and streamlined platforms to ensure ease and satisfaction from both a consumer and company perspective.

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Posted in Referral Marketing

Amity Kapadia

Written by Amity Kapadia

Amity Kapadia is Director of Content Marketing at Ambassador. She spends most of her days marketing to marketers and having the internal debate, to pizza or not to pizza?

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