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Channel the Power of Referral Marketing

Kindra K, Marketing Coordinator

Apr 3, 2018 @ 4:00PM 4 minute read

People are generally creatures of habit. We get our hair cut by the same person, we order the dish we already know we like, and we buy products that we trust. When we can no longer rely on our own experience to make decisions we look to the people we trust for new recommendations. That’s why, if done right, referral marketing is one of the most efficient ways to gain new customers for your business. Below are some referral marketing strategies to get you started.

Why are referrals important?

There are three reasons referral marketing is one of the most cost-effective marketing strategies that also tend to have extremely high conversion rates.

Exact targeting

It’s like the old saying goes, “Birds of a feather, flock together.” When your customers are referring you to their friends and family, you know that you’re targeting individuals that are similar to customers that have already booked you. Simply based on the fact that they were a referral you’ll know that they’re in need of the service you provide and are a good fit for how you run your business.

Trust building

When you’re looking for a recommendation who do you trust more: A complete stranger online or someone that you know and admire? We tend to be more trusting of the experienced-based, opinions we hear from friends, family, influencers, and anyone that’s already gained our trust.

Reach

The number of leads you can gain from your customers is endless. Each of your current customers has a number of referrals they could send you. Every time you gain a new customer you’re gaining another batch of possible referrals, and so on and so forth. This makes referrals one of the most scalable channels for leads available.

What makes a good referral marketing campaign?

A good referral marketing campaign is low-cost, while still incentivizing your referrers to tell others about your service with something that makes them feel valued. You can choose to give a discount on your service for a certain number of referrals, send them a company t-shirt, or offer a gift card of some sort. Here are a couple examples of successful referral programs.

Uber

If you’ve ever signed up for Uber you know about their referral program. In all seriousness, if you haven’t heard of it, Uber is a ride-sharing program. The success of their company is largely attributed to their referral program. How it works is each customer is automatically given a unique referral code when they sign up. If they give their code to their friend all the friend has to do is enter the code they gave them and both individuals are given a discount on their next ride. The unique code makes the customer feel valued, while also offering a monetary incentive.

Dropbox

Dropbox is an online file sharing and storage company that offers cloud storage, file synchronization, personal cloud, and client software. Their referral program is different from others because their incentive isn’t monetary, instead, they offer product based perks. They offer an extra 500MB of free storage. Like Uber, they reward both the new customer and the referring customer the extra storage space. This referral strategy tends to provide the highest quality leads since both participants are interested in having more engagement with your product or service.

Go to market strategies

Now that you have an idea of different kinds of referral programs and why they’re important, here are six strategies to ensure your campaign is a success.

1) The customer experience  

While providing great customer service on the job is important, unfortunately, it’s not enough to motivate your customers to share it with others. If you want them to recommend you to their friends and family, you’ll need to provide them with a memorable experience that begins before the job even starts, and continues well after the job is completed. This means doing things like allowing them to conveniently book you online, providing open communication, and following up with them after the job is done.

Customer Experience

2) Reporting, metrics, and analytics

In order to see if your campaign is actually working, you’ll need to be meticulous about your reporting. That way, you can see where your customers are coming from and find new opportunities to gain more. You’ll want to start by implementing a way to track where your new customers are coming from. A good way to do this is through a referral code or asking how they heard about you in an exit survey. Once you have acquired enough data, you can dive deep into your metrics to see what’s working and what’s not. Keep in mind, if something doesn’t work right away it doesn’t mean it’s a bad campaign. It might just need some more time to gain momentum.

3) Make your service shareable

An easy way to create more brand awareness within your targeted demographic is through your customer’s social media. Everyone on social media knows that customers love sharing experiences like what they eat, where they’re going, and whatever else they think others will find interesting. Make your service easy for your customers to share with their friends and family by providing them with before and after photos to share on Facebook, Twitter, or Instagram. You can make this even more appealing by making a contest out of it. Just have them tag you in their post to be entered to win a discount on their next service. There are plenty of free programs online that randomly select a winner for you.

4) Gather more reviews

Another form of referrals comes from the advice of strangers on the internet, aka online reviews. Yes, your customers do look at these. If they don’t know anyone personally that has worked with you, they’ll look online for an educated opinion. If you know that your customer had a great experience, ask them to leave you a review on your website, Google, Facebook, or Yelp. Try automating this process by setting up an email marketing campaign that asks your customers to leave you a review a week after the job is complete.

5) Collect your assets

You can create new assets, or repurpose previously used graphics/copy, making the process even more efficient. Keep track of all of your before/after images, customer reviews and testimonials, and additional assets you’ve acquired. That way if you want to share anything on social media, or provide potential customers with examples of past work, testimonials, and recommendations you can do so without chasing them back down. It is important to keep a strong collection of assets that will be ready to use at any moment so that you aren’t held back when the need for graphics arises.

6) Create your rewards incentives

You can create new assets, or repurpose previously used graphics/copy, making the process even more efficient. Keep track of all of your before/after images, customer reviews and testimonials, and additional assets you’ve acquired. That way if you want to share anything on social media, or provide potential customers with examples of past work, testimonials, and recommendations you can do so without chasing them back down. It is important to keep a strong collection of assets that will be ready to use at any moment so that you aren’t held back when the need for graphics arises.

Knowing the value of referral marketing is vital to helping your business grow. By creating a well-planned referral campaign, you’re turning your customers into advocates for your business. Since the customers you gain came from an opinion they respect, they’ll be more likely to become a loyal customer themselves. Investing in a referral marketing campaign will ultimately save you time and money while nurturing a source of leads that have an endless potential.

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