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    Running Effective Referral Programs: The Formula For Success

    5 minute read

    While not all effective referral programs yield the same results, there are some steps you can take to set your brand’s referral program up for success. Long story short, your goal is to help your brand ambassadors help you.

    In order to build a successful referral program, let’s start with a few basic questions:

    1. Are you manually enrolling brand ambassadors into your program, or is it automated via referral software?

    2. How do you manage referral activity - with spreadsheets and multiple documents, or via a dedicated referral marketing platform?

    3. Do you have a strategy in place to track and measure referrals?

    4. Are you modeling your program — if you have one at all — after proven best practices?

    5. Are you leveraging the right technologies to optimize your campaigns, scale your program, and drive referral ROI as high as possible?

    Ultimately, referral marketing is most valuable when you’re able to easily amplify results without also proportionately amplifying internal resources. With the right tools, capabilities, and systems in place, achieving efficiency at scale is quite possible.

    Effective Referral Programs Image 2Formulating Effective Referral Programs

    Referral marketing, like most marketing strategies, is not a "set it and forget it" initiative. In order to see real results, you need to manipulate certain variables until you figure out what works best for your business. While you still might have to tinker around a little, we can give you a head start with how to run effective referral programs. We've gathered best practices utilized by our most successful clients to create what we’ve coined as The Formula for Success. The tips and tricks outlined below are turnkey, low effort ways to create a fully scalable referral program that drives new business and significantly increases your bottom line.

    Variable A = Audience

    The first variable in the equation is audience. Focus on increasing the quality and quantity of your ambassadors by leveraging these 5 factors.

    Create an Open Program
    Some website visitors may never buy, but they could know people that will! Open up your program to allow anyone visiting your website to refer.

    Auto-Enroll Customers
    Every customer has liked your brand so much that they have gone through the purchasing process. Turn those customers into ambassadors by auto-enrolling them as soon as they make a purchase to maximize your referral opportunity.

    Utilize Net Promoter Score
    NPS® helps identify promoters who should be enrolled in your program. Contact us to learn more about Net Promoter Score.

    Kickoff the Program
    Don’t just hope that ambassadors will find your program. Announce your program launch through dedicated emails and social posts to start seeing results quickly.

    Build a Program Overview Landing Page
    Provide ambassadors with a comprehensive overview of the program. For increased visibility, include a link to the overview landing page in the header or footer of your site.

    Variable B = Engagement

    The next variable to consider is engagement. How are you communicating and engaging with members of your referral program? Here are six ways to keep your program top-of-mind with brand ambassadors.

    Add a Refer-a-Friend Module
    The most successful referral programs make it easy to share. Add a refer-a-friend module across your website, including post-purchase, to see your share volume go up.

    Add a CTA in Emails
    Whether you include a call-to-action in your newsletter or in email footers, this is an easy way to promote the program via existing marketing efforts.

    Encourage Employee Promotion
    Employees tend to have the highest touch points with customers. Have them include the referral program in their email signatures for increased visibility.

    Post on Social Channels
    Continuous social promotion of the program will help you enroll new ambassadors and remind existing ones to share.

    Send Dedicated Emails
    Encourage engagement by providing useful program information in dedicated emails. These emails can offer suggestions for seeing success or even highlight top ambassadors.

    Offline Promotion
    If customers are engaging with your brand offline, ensure that you’re promoting the program in-person, as well. This can be implemented via flyers or shipment inserts.

    Variable C = Incentive

    The last variable in the formula is probably what your brand ambassadors consider the most important factor: The incentives. Ensure you’re referral program is offering the right incentive at the right time to increase referrals by utilizing these three best practices.

    Set up a Commission Bonus
    Encourage your ambassadors to send you more referrals by setting up a commission bonus. Each time they hit a threshold, they’ll earn a higher reward.

    Offer a Dual Incentive
    Rewarding both the ambassador and the referee can provide a substantial lift. Coupon codes are a great option for incentivizing the referee to convert.

    Set up a Multi-Event Reward
    Keep ambassadors motivated during long purchase cycles by offering a reward for more than one event. For example, configure an initial commission of a lower amount for a new lead in your pipeline and a secondary commission of a higher amount when the new customer completes the sales cycle.

    effective referral programs image 3The formula for success results in growing referred customers and new business as well as increasing brand awareness. By leveraging these referral marketing best practices, tips, and tricks, your marketing team will be able to remove much of the complexity, tedium, and guesswork that comes from running referral campaigns. And that leads to executing efficient, measurable, and profitable referral marketing campaigns that, over time, positively influence every aspect of your marketing strategy.

    Referral Marketing Formula for Success CTA

    Posted in Referral Program

    Amity Kapadia

    Written by Amity Kapadia

    Amity Kapadia heads up content marketing at Ambassador. When she's not writing a blog post, editing an eBook, or reading copy, you can find her watching Real Housewives.

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