How to Make Your Referral Program More Effective

If you're wondering how to make your referral program more effective, you've come to the right place! We're going to share 10 tips to running a highly successful (and revenue generating) referral program.

Most savvy marketers today are driven by data. And the numbers don’t lie: a referral strategy is the most valuable marketing channel and generates quality leads. In fact, having a referral program can help your brand keep up in an industry where word-of-mouth travels far and wide.

How far and wide?

Let's start with why referral marketing is important

Well, according to a study released in partnership with Nielsen’s Harris Poll Online, 82% of people seek recommendations from friends and family when considering a purchase, while 67% say they’re more likely to make a purchase when a friend or family member shares it online.

Those are some pretty impressive stats. Which is why we did some further digging into referral marketing in the eCommerce space and found even more staggering numbers.

Basically, if you were able to enroll 10,000 brand ambassadors in a referral program and 40% of those ambassadors shared their unique referral link, our research shows that you might be able to expect 46,000 site visits and more than $166,000 in new revenue.

All from a channel that — depending on the referral incentive you offer — has been proven to lower customer acquisition costs and improve customer retention. No matter if you're using a custom build or a pre-built referral marketing software, there are a few things you'll want to keep in mind.

10 ways to make your referral program more effective

Recognizing the impact of a referral program and actually creating your own success story are two very different things. In order for your strategy to be successful, you must take the time to holistically optimize.

Here are 10 referral program tips to turn your strategy into a powerful customer-generating machine.

Tip #1: Know What You’re Aiming For

Before you even begin your referral marketing program, it’s important to have a target to work toward. Otherwise, you won’t be able to measure your progress. Hammer down exactly what you’d like to accomplish with your program – for example, a 10% increase in sales over the next 6 weeks. That way you’ll have a clear picture of what you’re trying to accomplish and can determine if your plan is really achieving the results you’re after.

Tip #2: Timing is Everything

The ideal brand ambassador is one that is intimately familiar with your product or service, and this comes from experience. Asking for a referral during your first interaction with a customer probably won’t net you the results you’re looking for. Make sure you’re tapping into your clientele at the right time – once they’ve had a chance to get to know your brand and what you have to offer. Develop a relationship first, and the rest will fall into place.

Tip #3: Make it Worth Their While

If you want people to sing your praises, you have to make it worth their while to do so. Offer something of value to your advocates and, more importantly, show them that they are valued. Keep in mind that your customers might be motivated more by altruistic reasons than self-interested ones. The more your customers feel appreciated, the more likely they’ll be to spread the word about your brand to their own networks. 

Tip #4: Have a Noticeable Presence

How can customers find your referral program? Where do they go to see their rewards? While more and more users are turning to their mobile phones and tablets for browsing, desktop still needs to be a major component of your overall referral program strategy.

Without getting your entire dev team involved, here are a few ideas on where to place your referral program on your website - so it is easily accessible to members of your program as well as new brand ambassadors looking to join and share:

- Navigation menu
- Footer
- Pop-up window
- Welcome bar
- Sidebar widgets 

Tip #5: Provide a Mobile-Friendly Experience

Mobile has fundamentally changed (and will continue to change) how, when, where, and why customers engage with and buy from your brand. This is why it's crucial the mobile experience of your referral program should be tailored to the user's specific platform and possess true cross-platform flexibility. This enables users to move smoothly and seamlessly between desktop and mobile devices.  

Tip #6: Ensure Easy Email Sharing

While social media has flourished in the past few years, email marketing isn't going anywhere. In fact, according to Salesforce, email marketing has an average ROI of 3,800%. For every dollar invested, the average return is $38.

This is great for budget-savvy marketers since your brand ambassadors are doing most of the emailing - investing more of their time, rather than your resources. Additionally, users are more likely to open a letter from a friend than branded emails.

Tip #7: Integrate with Popular Social Media Networks

For referral marketing success, your brand needs to be where your audience is - which is typically on social media.

For easy sharing of content, unique links, and promotional offers, integrating with popular social networks like Facebook, Twitter, and Instagram is essential.

The easier the process (read: less clicks), the more your brand ambassadors will share.

Tip #8: Offer the Right Reward

Points programs, discounts, and branded swag may sound appealing, but there is one reward that always works when it comes to getting people to recommend your business to others.

What is it? Monetary incentives.

According to the study mentioned above, 88% of Americans stated they would like some sort of incentive (money, product or service, loyalty points, early access, swag) for sharing a product with their online networks. Additionally, 77% of Americans identify money as their reward of choice.

Tip #9: Arm Yourself for Success

While you can certainly manage a referral program on your own, the right referral software for your business will help take that program to a whole new level. It will allow you to track, manage, and optimize all your referrals from a single dashboard and perform ongoing analysis to more accurately measure and improve your progress. 

Tip #10: Say ‘Thank You’

Lastly, although certainly not least, don’t forget to thank your ambassadors after every successful referral. It could be as simple as an email, or as elaborate as sending a gift – as long as it delivers the message that you appreciate their support and value them. This will, in turn, further nurture those important relationships and encourage future referrals.

At the end of the day, focusing on continued engagement is the best way to truly succeed with referral marketing.

We've said it before, the best referral programs evolve over time. Be flexible, offer different types of rewards to new and existing customers, segment, or turn to gamification – it's all about finding the right formula for you. 

A successful referral program can make your business more profitable, but it’s only as good as the work you put into it. When done right, having a referral program in place can be a real game changer.