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Referral Marketing Strategies: 5 Best Practices

5 minute read

The best referral marketing strategies share a common thread: Referrals are embedded into every aspect of the user experience. For a referral program to consistently deliver truly exceptional results, your brand’s referral marketing strategy must take all marketing channels into consideration. Basically, your program should be woven into who you are and how you operate. Without structure and commitment, you’re largely hoping that good things happen and that customers inherently know to refer their friends and colleagues to your business.

That might happen. Or it might not.

Instead of wishing, hoping, and praying for referrals, let's talk about how to get more referrals.

In almost any successful customer journey, there’s at least one “moment of delight,” a point at which the customer is happiest with or most excited about your product, service, or brand. These “moments of delight” are perfect opportunities to present customers with the opportunity to refer others to your product or service. This is also where it can be very beneficial to have insight into how your prospects funnel through to become customers and the journey thereafter.

If you want to take your referral program to the next level, here are 5 best practices to help you get there:

1. Your Referral Program Should Be Easy To Find

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Don’t make your customers root around your website searching for a referral link. Or even worse, dig through their email to find out how to log into your portal and see their reward status. The harsh reality is people aren’t going to sign up for your referral program if they don’t know about it, so make sure you’re making it visible and prominent. Remember, the entire purpose of the program is to get people to spread the word about your brand, products and/or services. If signing up to do so is difficult and frustrating, you won’t get the results you’re hoping for.


2. Always Be Transparent 

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Now, more than ever, consumers are highly cautious about sharing their information – especially online. Make your customer referral program more attractive by being upfront and honest about the entire process. Let program members know how their information will be used, how they can keep track of the process and exactly what they’ll get in return. The more information you share about your program, the more at ease your customers will feel and the more likely they’ll be to sign on. And on the flip-side, 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.


3. Know What Your Customers Want

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If you want to entice people to share your brand with their own networks, you have to provide them with something of value in exchange. Understanding your customers isn’t enough; do you know what they truly value? If your incentive isn’t worthwhile, your customer referral program will never even get off the ground. 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. Sometimes recognition, such as being featured on the website or in an ad or blog post, can be equally as attractive as other types of incentives.


4. Ask At The Right Time

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Your customers aren’t going to want to refer a friend if it’s the first thing you ask them to do. In fact, if you start an interaction by asking for a referral, you may lose the sale altogether. You have to wait until the right time. This is also where it can be very beneficial to have insight into how your prospects funnel through to become customers and the journey thereafter. Studies have shown that the moments following a shopping transaction - commonly referred to as a "shopper's high" - are a highly effective time to ask for a referral, since the rush of the purchase is still lingering. Or, you might wait until after the customer has received the product or services and are satisfied. And 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.


5. Invest The Time And Resources Necessary

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A successful customer referral program can become the lifeblood of your business, but it won’t do anything if it’s not backed by the proper resources. The program should be strategically planned out, regularly measured, and managed on an ongoing basis. When you invest in your program, you can see unimaginable growth through this marketing channel (just look at the ROI of referral marketing by different industries). You can’t achieve success if you’re treating your referral program as an afterthought. Successful programs need structure and commitment from within your company. For this reason, many brands choose automated and streamlined platforms to ensure ease and satisfaction from both a consumer and company perspective.


A Winning Referral Marketing Strategy 

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.

By implementing these best practices into your referral program strategy, you’ll be much more prepared to develop a program that will net the results you want without incurring too many roadblocks along the way. The secret is to approach referral marketing just as you would any other high-value customer acquisition channel — investing in process and technology, and incorporating it into every aspect of your marketing strategy. When you do that, the payoff can be huge.

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Posted in Referral Marketing, Referral Program

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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