It’s not uncommon in referral marketing that companies push their referral programs so aggressively that it causes damage to the brand.
So how do you avoid this?
How do you build a successful referral program that creates an ongoing stream of leads or revenue for your startup without losing sight of what’s important – end user satisfaction? =
1. You get referrals from people organically
Organic leads are some of the best you can get in business, showing that people who found your business are interested after doing initial research and contacting you on their own volition.
Friends and family often refer us to brands that they have tried. These are called organic referrals because word of mouth marketing is not actively planned by the brand.
If someone shares your business in a good way, it means that they had a good experience with you. They might tell their friends and family in person, they might write an online review or they might share something on social media that you made. Whatever the method, it creates opportunities for people to refer your business organically.
How to Identify Organic Referrals
There are three core sources where you might receive organic referrals: on your website, review services and word of mouth.
Organic Referrals from Your Site
Your own website and social media outlets are key in securing referrals from people finding you naturally on the internet or those who receive a recommendation. No online presence means no confirmation for referral sources.
There are many different review sites available to you that include Capterra, Facebook, Trustpilot and more. Simply getting your business listed on these websites might start bringing in enough referrals as people consider what they want from the market.
Brands often worry about bad reviews on public sites. I know what many brands think when they read reviews from their customers. They often say to themselves, “Why are people saying such bad things about me? I've worked so hard on this product.” The thing that's most important about this is to realize the problems that they've shown concern with. That way, you can understand how to better deal with them as a business! If you're calm, it's possible to fix the situation. If you could make an impression on your customers that makes them happy, they're going to come back.
Reviews on products are helpful to both consumers and entrepreneurs. Reviews help customers make a decision, while also providing valuable feedback for the business owner. Reviews are an important part of the buying process. When people see how many positive reviews a product has, they'll want to get it too!
When someone organically refers you, it’s highly likely that they refer you again when there are referral rewards to be claimed.
2. You have good customer service
A business that takes care of its customers is a successful business.
Having world-class customer service is an absolute must if you want your business to succeed. When providing customer service, it’s important to not only commit to answer customer concerns, but additionally to communicate that you’re doing everything you can for them.
Consistency is important. If you deliver value to customers consistently, they'll tell their friends about your business and it will grow.
One of the easiest ways to provide a great customer experience is personalizing each interaction. It's not hard, but it can certainly make a difference in how loyal and happy your customers are. You can set up email automation to do most of the heavy lifting for you.
3. Your customers have been around for a long time
Retaining customers is extremely important. In fact, it's three times as expensive to attract new customers than it is to keep current ones happy. If you're in business, you might get caught up in trying to sell your products to new customers. This isn't a bad thing, but remember that it's also important to focus on retaining existing customers.
If you want your business to be sustainable, then you need repeat customers.
4. Your Net Promoter Score is excellent
The Net Promoter Score is an easy way to measure customer satisfaction. Customers will answer questions and then you can see if they recommend you. The score is usually calculated with the question, “How likely are you to refer us to your friends and family?” People answer this by using a scale of 1-10. The people who answered 1-6 get one point. Those who answered 7-8 gets two points and those who gave 9 or 10 get three points.
If the majority of people are scoring your business a 9-10, then you have one type of customer – Promoters. These types of customers should be good for referrals because they could tell their network about your company and potentially put in a good word.
5. You have organic word of mouth marketing
I recommend that you find a way to measure word of mouth marketing because it's hard to directly track. If you're getting a high volume of organic leads, that means your business is on the right track with word of mouth marketing.
Word of mouth is a very important method for getting organic traffic. My favorite way to develop word of mouth is through content creation.
Many see referral marketing as a more formal form of WOMM. If your customers are already talking about you and sending referrals, they would likely enjoy a formalized referral program that includes incentives.
Has your company considered launching a referral program?
A referral program is one of the most cost-effective ways to get more customers. When you have a referral program, it's like getting paid for your customers to tell their friends about your business.
Chris Tweten is the CMO of GrowSurf, the referral software for B2B and B2C tech companies.