There comes a time when every business will weigh the pros and cons of creating a referral program, whether it is online, in store or both. Once they’ve made the decision to create one, or jazz up an existing program, it becomes necessary to make it as effective as possible. The way to ensure your happy customers will refer your business is to make it worth their while to do so! This is where offering rewards kicks in. Take a look at your referral program and ask, “Is this creating a win-win situation for both me and my customers?” If the answer is “No” or “I’m not sure”, try following some of these tips to ensure you get the best results.
Make it Valuable
If there is no apparent value in your offers, no one is going to take part. Your offers should be something that makes referring others worth the time and effort it takes, not just a pat on the back. By offering rewards of some substance you increase referral likelihood, and show your customers that you value them.
Offer a variety of reward options, double sided rewards, or change your options throughout the year. This not only increases the chances that more customers will be interested, but it will also encourage them to refer more often. If they make referring a regular occurrence, their brand advocacy will continuously increase in value. Take a look at what these companies offer in their referral programs:
• Growth Hacker TV grants 25% off your monthly subscription for every active member you refer (after four referrals your subscription is free). They also give 25%/month off to your referrals.
• Spotify rewards users with a free month of their premium service for every 5 friends that register.
• ShortStack pays 30% commission on every sale generated through individualized links.
• SpiderOak offers 1 GB of free space for you and your referral with every sign up (up to 10GB free).
• Media Temple will give you credit equal to the first month of your referral’s chosen plan, and they get 20% off.
Why not tailor your rewards to your target audience’s wants? For example, Roku, makers of streaming players, offered a free month’s subscription to Netflix. Or, you could try tailoring it to the season; since we are in the middle of winter you could offer lift tickets to specific ski hills. Or, in the spirit of the holidays, you could make monetary donations to a charity. What ever you choose to offer as a reward, make sure it’s valuable to your clients but doesn’t outweigh the profit you will make on new customers.
Remember to Give Thanks
Create a general thank you email that you can personalize for every referrer. Show your appreciation for them bringing in new business. People like to be valued every step of the way, so give thanks for every referral, not just the ones resulting in a sale.
Referral programs and rewards go hand-in-hand for a reason; they work. 65% of new business comes from referrals, and by implementing rewards into your referral program you can keep current customers interested and engaged, all the while bringing in a surplus of new capital. If you’re still not convinced, take a look at the results Dropbox saw following their referral program. By giving away additional storage space to both referrers and referrals, signups increased by 60%, and within 15 months they had increased the amount of registered users from 100,000 to 4,000,000!
Satisfied customers may already be spreading the word about your business to their very close friends and family in casual conversation, but by creating a referral program and chalking it full of rewards, you can drastically increase the amount of successful referrals. As the saying goes: give and you shall receive!