There are an endless number of customer referral programs and ideas available to those who take the time to do some minor research. However, those ideas and programs do not explain to us why we need these programs in the first place.
There are an endless number of customer referral programs and ideas available to those who take the time to do some minor research. However, those ideas and programs do not explain to us why we need these programs in the first place. When you begin the process of brainstorming your customer referral ideas, you will likely have one initial question. What is so great about customer referral programs?
A study published in 2011, in the American Marketing Association's Journal of Marketing, reported that referred customers have the tendency to be more loyal than other types of customers. Also, that over time, the difference persists. This study proved that referred consumers are valuable to a business both in the short and long run. Other important data that the journal displayed were that customer referral leads tend to be more qualified buyers and reviewers as well as less price sensitive when it comes to quality offerings.
Many of the world's leading brands have begun to take notice of how valuable referral consumers are and have enacted their own customer referral programs. These companies include:
- Chase
- PayPal
- Groupon
- Netflix
- Dropbox
The most vital element to consider is how can you best say 'thank you' to customers who send referral business your way?
What Customer Referral Programs Will Work for Your Business?
You should expect to have a difficult time with initial referral marketing programs, most especially if you do not hire a marketing specialist but choose to brainstorm your own ideas. This may not be a bad idea for your business as long as you have the capital to sustain it. With so many new businesses and newly digital businesses, it can be difficult to find the perfect customer referral programs for you and your consumers. Keep looking until you find one that brings the results you were aiming for.
Try a top-down approach. Brainstorm all of the ideas that seem viable and put them on a list in order of most likely to succeed. Aim at your consumer-base with the big guns, and follow down the list until it is exhausted. If you haven't built a good referral base by then, it may be time to call in the experts.
What if I Do Not Build A Referral Program?
No one says you have to build a referral program. However, in a time where there are hundreds, thousands, possibly even millions of businesses that have had the playing field leveled by the addition of the internet into our world, having preferred and stabile customers may be what carries your business through the tough times. Keeping the real supporters of your business happy is imperative.
The main focus when creating customer referral programs is to build on relationships, to do that you will need to build on trust. Regardless of the type of program you decide to carry out, you will want it to build upon the trust a referred customer comes pre-packaged with. Proving to them that being sent to you and your business was a 'gift' from whoever referred them should be your top priority.
What Type of Marketing Referral Program is Best for Your Business
To understand what type of marketing referral program is best for your business, it may be vital to first understand where referrals can come from in the first place.
When Your Referral Rewards Program Goes Wrong
The horror stories are enough to scare any small business owner into inactivity. That one business that was doing great with an excess of capital decided to enact a new referral program and the next news you heard was how they overextended their offer and were swept up and down the creek into bankruptcy. It can and does happen. When your referral rewards program goes wrong there can be a few good reasons why.
4 Tips for Preparing Your Business for Referrals Programs
If you have established your business, set up some marketing efforts and branded your company's name, it may be time to prepare your business for referrals programs.
