Tips for launching a successful referral marketing program


The NY Times states that over 65% of the new business comes from referrals. Yes, that’s more than half! So that means every marketing effort that you take – social media, ads, email as well as the other campaigns combined are just not as powerful as a recommendation that you get from other customer. Further, researches prove that customers are four times more likely to make a purchase when referred. Bottom line, referral programs work! However, acknowledging the impact that a referral program has and actually creating a success story out of it are two completely different things. There are certain reasons why most referral programs fail. Let’s find out!

Reasons why Referral Marketing Programs Fail

A lot of referral marketing programs are unable to get the requisite traction. The degree of benefits is huge but despite that very few companies are unable to decode it. Here are some reasons why referral marketing programs fail.

Very little continuity

Usually, the referral marketing programs fail because there isn’t much cohesion amongst the different departments and teams of the business organization. Executives tend to delegate the work to the sales, marketing and the customer service department but fail to assign due responsibility to these three groups. This is one big mistake which often results in biased programs that doesn’t take quintessential aspects into consideration.  

Not enough focus on roll-out

Most referrals programs are initiated with good intention however they tend to focus way too much on the program itself and not much on the roll-out. Exact terms and conditions of the program are easy to craft however it is the marketing program that businesses fall short. Weak roll-out often results in under performing programs.

Not offering enough incentives

Moreover, referral programs tend to fail because there aren’t enough incentives offered to the customers to pursue referrals. In other words, the energy and the time that goes in finding new customers is some times not worthy of the rewards that customers achieve in return.

Ignoring customer segmentation

When it comes to referrals more isn’t always better. Always seek few quality referrals over hundreds of questionable ones. Despite this, several customers go after any and all customers thereby resulting in the weak prospects leading to unnecessary waste of time.

Now, that you have an idea about the reasons why most referral programs fail, it is also important for you to understand the pointers that will help you launch a successful referral marketing program. Let’s take a look at 6 Key Tips to launch a successful referral marketing program.

6 Tips for launching a successful referral marketing program

Know What You’re Aiming For
Before you launch the referral marketing program, it is imperative for you to set a target towards which you’ll work. When you have a definite target you are able to measure the progress of your work. Hammer down, what you wish to achieve, for instance, a 5% hike in sales in the following 6 weeks. As a result of this, you’ll have a definite picture of where you are and where you wish to be.  

Timing is Everything
Your ideal brand ambassador can be someone who is closely familiar with the product or service that you offer. When you expect a referral on the very first interaction with your customer, you are probably expecting way too much. Take steps to tap into your clientele at the right time i.e. after the customers get to know you and your brand properly. It is important for you to build a relationship first and then be assured, rest will fall into place.

Make it worth their while
If you want the customers to sing your praises, it is necessary for you make it worth the while – both customer service and buying experience. Offer product or service of substantial value to your advocates. Let your customers know that they are valued. What’s important to know is that customers are largely motivated by the altruistic reasons rather than the self interested ones. More your customers feel appreciated, the more likely they are to spread the word about your brand to their intimates.  

Make it easy for your customers to refer
Customers will refer you when it is easy for them to refer you. There are lot many ways you can do that. One powerful way to do is including a refer tab on the web page itself. Adding social sharing badges on every product also works best.

Don’t ignore the analytics
Of course you can manage a referral program on your own however, having a right software for your business is necessary. This software must help you track, manage and optimize your referrals in a manner that they produce better results.    

Thank You works always
Last but definitely not the least, never forget to thank your associates after they make every successful referral. You can thank them by means of an email or a small (inexpensive) gift or just a thank you note to convey the message and appreciate the support that they have given you. This will further strengthen your relationships and encourage future referrals.

Final Say

Undoubtedly, a successful referral program does makes businesses more profitable. However, it only works as good as the effort you put into it. Implement these 6 simple suggestions and you’ll be on your way to develop your own army of revenue generating advocates.

KartRocket has empowered 3000+ entrepreneurs, SME’s and retailer with their online stores. It is not just a website builder platform, it’s an end to end eCommerce solution with all the features you require to create an online store, run & grow your online business.

Puneet Bhalla

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