Referral Program | The Do's and Don'ts

A referral program can be highly effective at increasing valuable word of mouth marketing, helping to improve brand awareness and boosting sales. Yet not all referral programs are created equal, and they don’t all produce the same results. It can be helpful to know ahead of time what does and doesn’t work when it comes to referral marketing. Here are some simple do’s and don’ts to help you avoid making some of the more common mistakes and create a program that will get the results you want.

Do: Be transparent

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 them 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.

Do: Offer something worthwhile

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. If your incentive isn’t worthwhile, your customer referral program will never even get off the ground. Offer something that your customers need or want. Additionally, don’t limit yourself to monetary or physical gifts. Oftentimes 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.

Do: Catch people at the right moment

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. Studies have shown that the moments following a shopping transaction are a highly effective time to ask for a referral, since the “sales endorphins” are still flowing. Or, you might wait until after the customer has received the product or availed themselves of your services and are satisfied.

Don’t: Just ‘wing it’

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 and regularly measured and managed on an ongoing basis. You can’t do that if you’re treating your referral program as an afterthought or assigning it to someone that isn’t qualified to handle such an important task. Also, make sure that you’re utilizing all of the tools that are available at your disposal, including referral software to automate the program and make managing it easier and more efficient.

Don’t: Make the program hard to find

People aren’t going to sign up for your customer referral program if they don’t know about it, so make sure you’re making it visible and prominent. Additionally, make the program rules easy to understand and the signup process user friendly. 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.

As with any marketing strategy, there’s a right way and a wrong way to handle referral programs. By understanding some of the do’s and don’ts ahead of time, you’ll be much more prepared to develop a program that will net the results you want without incurring too many headaches along the way.