May 4, 2022

The Dos and Don’ts of Creating a Referral Program

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Creating the right referral program can yield powerful results for your company. Not only does it boost overall brand awareness; it also can increase retention and create more loyal customers that serve as social proof.

Before creating your own referral program it’s important to know some best practices in addition to common pitfalls in the process. This helps your team create a specialized strategy that fits your needs and can adapt over time.

Creating a Referral Program: Do Personalize Your Campaign

Personalization goes a long way to better appeal to the customer. It shows that you don’t see them as another entry in the ledger, but rather as a human being that is crucial to brand success. In other words, humanizing your approach can improve your early chances of getting a handful of referrals.

There are a few ways to personalize your request. Mention their name in your message or check in to see how they are enjoying the product or service you offered. Ask if they’d be willing to tell others about your experience.

As you create your referral requests, keep in mind the fine line between organically asking for their help and demanding it. Too much of the latter can turn even your best customer into a one-time purchaser.

Creating a Referral Program: Do Offer Rewards

The best way to convince people to do something is with a reward. Referral programs work well because of it, but it’s important to gauge what exactly will motivate people to participate. Is it a discount? A path to earn something for free? Is it early access to an upcoming product? Get an idea from your consumer base and the industry at large to ensure that your strategy meets expectations.

When done correctly, providing the right rewards solves two major problems: attracting new customers and retaining existing ones. The right balance in your strategy can encourage your fans to spread the word while also convincing them to shop again at your locations.

 

 
 

Creating a Referral Program: Do Show Transparency

If part of your plan involves asking for multiple entries of information from customers, it’s important that you be open about why you need it. Just as important is to also tell them how you intend to use the information they provide. If your reasons are just and don’t seem to hide any hidden agendas, customers might be more willing to give you the information you need up front.

Transparency isn’t just the morally right thing to do as a brand. It helps create trust. In an age where privacy is more important than ever, a company’s need for information can easily turn people away. Being open about your plans creates a solid foundation for trust and more importantly, loyalty, down the line for returning customers.

Creating a Referral Program: Don’t Make It A Complicated Process

If you’re asking customers to help you spread the word about the brand, make sure that the process is easy to follow and conduct. People get discouraged easily if there are too many steps involved or if multiple sign ups, web pages, or apps are needed to reach the goal.

As you plan your referral program, aim to reduce friction as much as possible. Not only does this help in increasing brand awareness to new people; it also makes it more likely for other customers to buy into your strategy.

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Creating a Referral Program: Don’t Reinvent the Wheel

Creating an effective referral program doesn’t mean that you have to start from scratch. Instead, take a look at current processes and see if there’s a way to integrate a referral program in the existing experience. Shifting a brand’s entire way of conducting business to accommodate one strategy can make the overall experience worse in the long run.

You can also look at how customers already interact with your company before and after their purchase. Their actions might reveal an organic way to introduce the referral program that won’t intimidate them or catch them off guard. For instance, see if they’re willing to refer your brand to others after they publish an online review or publish a post on social media. This makes it easier for the company and consumer to better interact after the purchase and provide a win-win situation for both parties.

Creating a Referral Program: Don’t Forget to Monitor Progress and Make Changes if Necessary

With a plan in place don’t neglect its progress over time. Keep an eye on engagement and see if any details need to be optimized to make the process as smooth as possible.

With time, your referral program will evolve not just to meet the preferences of customers but also due to changing company goals. Having a solid framework to begin with makes it easy to tweak details without drastically changing your entire strategy.

Conclusion

With these tips in mind, creating your own referral program should be easy and effective. Even though it serves your customer acquisition purposes, the way you approach customers and ask for their referral has an impact on brand reputation. With the right words and process in place, you can put a program in place that keeps customers delighted while also appealing to others who are looking for that differentiator before they make a purchase.

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