The Ultimate Guide to DIY Referral Marketing

Referrals from happy customers are some of the highest-quality leads you can attract. Not only are referrals more likely to convert, but they also tend to have greater trust and loyalty from the start. According to Deloitte, customers who were referred have a 37% higher retention rate than customers who found the company through other means.

The key is to empower your existing customers to become active promoters of your services. By implementing a simple, "do-it-yourself" (DIY) referral program, you can harness the power of word-of-mouth marketing and unlock a consistent stream of new business. According to a study by the Wharton School of Business, the LTV (lifetime value) of a customer who was referred by a friend is 16% higher than someone who was not referred.

In this comprehensive 5-step guide, you'll discover proven strategies for creating a thriving referral program that drives real results for your company. From developing enticing incentives to streamlining the participation process, you'll learn how to turn your happy customers into your most effective sales team.

5 Steps to Referral Program Success

1. Develop an Attractive Referral Incentive

The right incentive is crucial for motivating customers to refer friends to your services. Consider offering cash rewards, discounts on future products, raffle entries, or a tiered system with multiple reward options.

2. Make it Easy for Customers to Participate

Simplicity is key. The more seamless you make the referral process, the higher your participation rates will be. Provide shareable digital assets, implement an online referral portal, offer multiple submission options, and follow up promptly.

3. Promote the Program Consistently

Maintain visibility and awareness of your referral program through prominent website placement, regular customer communications, seasonal promotions, and public recognition of participating customers.

4. Track and Analyze Program Performance

Set clear metrics, utilize tracking tools, analyze referral sources, and solicit feedback to identify areas for improvement and maximize the impact of your referral program.

5. Continually Refine and Optimize

Regularly test different incentives, streamline the referral process, diversify your promotion tactics, and incorporate customer feedback to ensure your program evolves alongside the changing needs of your business and clients.

Develop an Attractive Referral Incentive

The key to a thriving referral program is providing incentives that motivate your customers to refer their friends and family members. When determining the right incentive, consider the following:

Cash Rewards

Offering a cash payment, such as $50 or $100, for each successful referral is a common and effective approach. This provides a clear financial benefit to your customers. You might even offer a smaller payment for a qualified referral and a larger payment if that referral becomes a customer. Estefany, a purchasing specialist at Suntria, explains how their customers love cash incentives:

Estefany W.

Purchasing Specialist @ Suntria

 

 

"They claim it within the day...it's easy money nowadays for them."

Discounts on Future Services

You could also provide a percentage discount on the customer's next purchase for each person they refer. This encourages repeat business while rewarding referrals.

Raffle Entries 

Enter customers who provide referrals into a monthly or quarterly raffle for a larger prize. This can create excitement and a sense of possibility. Possible ideas for fun raffle items include technological devices, vacations, concert tickets, etc.

Combination Incentives

You could also offer a tiered system that includes both cash rewards and discounts, with higher payouts for multiple referrals.

No matter which incentive you choose, be sure to clearly communicate the terms and conditions to your customers, including details on payout, eligible referrals, and any program limitations.

Make it Easy to Participate

Simplicity is key when designing your DIY referral program. Nancy Harhut explains in her book Using Behavioral Science in Marketing that “Your customers and prospects will have a natural tendency to go with the flow, or with the suggested or easier choice." The easier you make it for customers to submit referrals, the more likely they will be to actively promote your business.

Nancy Harhut

Author of Using Behavioral Science in Marketing

 

 

"Your customers and prospects will have a natural tendency to go with the flow, or with the suggested or easier choice."

Possible strategies include:

Provide Shareable Digital Assets

Create customizable referral cards, flyers, or social media posts that customers can easily download and share with their networks. Include your company logo, contact information, and a clear call-to-action.

Offer Multiple Submission Options

Allow customers to refer new leads via phone, email, text, or an online form. The more flexibility you provide, the higher your participation rates are likely to be.

Create an Online Referral Portal 

Build a dedicated page on your website where customers can submit referral information, track program progress, and claim their rewards. This centralized hub makes the process seamless. Ensure this page is easy to find from your homepage.

Follow Up Promptly

Respond quickly to all referrals, thanking the customer and providing updates on the status of the lead. It requires a lot of confidence for someone to refer their friend or family member to you, so this shows you value their efforts and are worthy of their trust. 

Promote the Program Consistently

Once your referral program is set up, it's important to maintain visibility and awareness among your customers. When explaining how to get customers to talk more about your business, Jonah Berger says in the book Contagious, “Top of mind means tip of tongue.” If you want people to remember to talk to their friends about your company and give you referrals, they need to be frequently reminded about your referral program.

Jonah Berger

Author of Contagious

 

 

"Top of mind means tip of tongue."

Try to incorporate the following:

Highlight the Program on Your Website

Dedicate a prominent section of your homepage or services page to promoting the referral program, making it easy for visitors to learn about and join. You might even consider a sticky widget that stays in the bottom corner of your homepage, constantly reminding people of the program.

Mention it in Customer Communications

Include information about the referral program in invoices, newsletters, email signatures, and any other regular touchpoints with your customers.

Incorporate Referral Messaging into Branding

Weave references to your referral program into your overall marketing and branding, from vehicle wraps to business cards. This helps keep it front-of-mind.

Recognize and Thank Participating Customers

Publicly acknowledge customers who have successfully referred new business, either through social media, your newsletter, or other channels. This reinforces the value you place on their efforts.

Track and Analyze Program Performance

Closely monitoring the success of your referral program is crucial for identifying areas of improvement and maximizing its impact. Implement the following to improve tracking and analysis:

Set Clear Metrics

Determine the key performance indicators (KPIs) you want to measure, such as the number of referrals, conversion rates, and revenue generated.

Utilize Tracking Tools

Invest in a customer relationship management (CRM) system or referral program software to automate the tracking process and provide detailed insights. If you can’t afford a CRM at the moment, consider using a spreadsheet to at least keep track of all the numbers in one location.

Solicit Feedback

Regularly survey participating customers to understand their motivations, pain points, and suggestions for improving the program.

Analyze Referral Sources

Identify which customers or channels are driving the most successful referrals, and focus your efforts on replicating that success.

Continually Refine and Optimize

The most successful referral programs are those that evolve over time to meet the changing needs of both the business and its customers. Regularly review and optimize your program by:

Test Different Incentives

Experiment with new reward structures or adjust existing ones to see what resonates best with your customers.

Incorporate Customer Feedback

Regularly solicit input from participants and implement their suggestions to continuously improve the program.

Diversify Promotion Tactics

Try new marketing approaches, such as referral-focused social media campaigns or in-person events, to reach a wider audience.

Streamline the Process

Identify and address any friction points in the referral submission or redemption process to make it as seamless as possible. Harhut teaches, “Research has shown that people's decisions are impacted by the way their choices are served up to them. How you organize your options is important." One of the most effective strategies is to present the path of least resistance to your customers. To streamline your referral process, you might consider getting rid of any steps or buttons to click that seem unnecessary.

Take Action

If you're feeling overwhelmed by all the steps required to build a successful DIY referral program for your business, let the experts at Snoball handle it for you.

Snoball is a leading word of mouth marketing platform that specializes in referrals, reviews, and reputation management.

Snoball understands that continual outreach is key, because less than 1% of initial outreach attempts result in a referral. In fact, Snoball’s data shows that more than 57% of referrals come after the initial request. 

That's why Snoball goes the extra mile in nurturing customer conversations, ensuring you never lose sight of your most valuable leads. Their team knows how to build those connections and maximize the referral potential of your satisfied customers. Through this nurturing process, Snoball is able to double a company’s referrals.

Ready to take your referral program to the next level? 

Schedule a demo with Snoball today and let their experts handle the heavy lifting.

And don't forget to follow Snoball on LinkedIn for the latest insights and strategies on word-of-mouth marketing.

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