Before we get technical: the Psychology of Referral Marketing

Stuart had been having one hell of a crappy week. Bullshit arguments with his girlfriend, his boss constantly at his back, and his car had broken down to the tune of a $800 gearbox replacement.

He slid his finger across the screen and saw an email from his sister: “Stu, thank you so much for sending me that book on SEO. It’s perfect, just what I needed!”

A nice little dose of Serotonin seeped into his bloodstream and a smile came on his face. Suddenly he felt just a little better about life.

Doing favors is hardwired into our systems. People LOVE helping others

Understanding how and why these psychological programs work will enable you to improve the way you communicate and teach your people, and that can dramatically increase the virality of your campaigns.

Part of the reason for our built-in tendency to help others is found back in the caveman days.

If you had just trapped and killed a deer and schlepped it back to your cave, offering to share it with Gruntr would mean you didn’t have to start your own fire that night.

That very basic principle still exists in us, just in different forms.

Psychologists call it the principle of reciprocity, and it’s a basic but very powerful human drive that there must always be tit for tat. Hoy por ti, mañana por mí. You scratch my back, I scratch yours.

Marketers use it all the time: Free eBooks, free samples, a no-charge mini-consultation - all these things contribute to later closing a sale, because it’s a repeated appeal to return the favor at some point. [Dr. Robert Cialdini: Influence - The Psychology of Persuasion.]

We also like just being a nice guy or gal, because it feels good

Another reason for doing favors is pure philanthropy: scientists don’t yet know why, but it’s a fact that human beings do things for others, simply because they can.

Even if there’s no external reward attached.
Possibly for no other reason than that it causes the release of happy-hormones like Serotonin into the bloodstream.

These two mechanisms make up much of why referral marketing works: we like sharing good stuff with people because it buys us future favors and because it makes us feel good.

But there’s another , even stronger psychological mechanism you need to know

If you know how it works, it can help you to get even more referrals out of your network.

It’s the most basic human drive: that of wanting to be the Alpha in a group. Not necessarily Alpha male or Alpha female - I’m talking about authority, in a general and more intellectual sense.

You, me, everyone, we all like it when others say: “You’re good at that”, or “You’re so smart”

It’s an unconscious thing in most of us, but we all want to be the most knowledgeable.

It gets us more cooperation and attention; gets us more results with people; it makes us feel good and inspires us - you too get your own type of kick out of being able to help or inform others.

It gives us an edge and makes us feel powerful. And that’s even before we get to earning money by disseminating or using that knowledge.

At the same time, we like people of authority. We actively seek authority figures, knowledgeable people - even if we (now or in the past) rebel against the authority of parents, teachers or the establishment.

The difference is that once you’re older, you select the authorities that inspire you and that you want to learn from.

But you still look for authorities. That blogger you followed yesterday? You did that because they know something you don’t, and you want them to tell you more of it.

The nice thing in all this is that having insider information and being able to offer exclusive deals or referral programs and so on, also makes people increasingly perceive you as an authority.

Appeal to their basic instinct by being in the know, to grow your authority and that of your customers

This works on all levels: from you down to your clients’ referrers. The more good stuff you’re able to share, the more they’ll pay attention to you and actively promote your program.

Messaging is what it’s all about: Your task is to communicate the benefits and after that the techniques for building and leveraging that insider expert status.

In that order, btw: messaging is important and you’ll find it much easier to ‘sell’ customers on being active if you show them the benefits first, and teach them the strategies after that.

Action:

Analyze your network’s recent activity and make a list of people who use their social media and promotion efforts to establish their authority.

You’ll quickly see which ones are the players: They typically offer membership or learning programs, or are in the business of direct teaching, for example.

Bestselling authors also frequently have authority aspiration or status in their network.

Filter the 50 most active or authoritative people into a separate list.

Create a custom, personalized message for each of them, based on the following template.

Hi {name},

 

I noticed that your referrers show little activity lately, and I though I would ping you to see if you want incentivize them again.

 

Since people really see you as an authority in your field, they would likely respond well to another round of invitation and promotion. They’re already looking to you for information, so why not give it to them?

 

Let me know if you’re up for it. I have a quick-fire plan we can implement basically today.

 

Thanks,

 

{yourname}

You can change it around to make it yours of course, but keep it short. Also: Avoid putting the blame on their own inactivity.

There you go: psychology to drive new and old customers into action.