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8 Tips for Starting a Referral Program That Will Improve Local Marketing

Here’s a fun stat for you: 90 percent of shoppers say online reviews impact their purchasing decisions. Regardless of what product or service they need, nine in ten people who are actively in the buying process will use the web to find out what previous buyers thought of your product. That’s a good thing… because you – you smart thing, you – can create a referral program that will help you build a catalog of great reviews to convert prospects to customers much faster.

Fair warning: Getting a referral program off the ground isn’t the easiest thing. Even if you’re currently creating amazing customer experiences, that’s not going to make people automatically leave great reviews. You have to ask for them, and your ask will often come with an ample helping of an “incentive” (or bribe, whichever term you prefer).

Why Referral Marketing Matters

There was an interesting set of stats on Inc.com that said only about one in ten satisfied customers leave a review while unsatisfied customers are far more likely to leave a review. Troubling? Yeah. Well, there’s more. The article went on to say it takes four 5-star reviews to make up for a single 1-star review. If only one in ten happy customers are leaving reviews, that means you need 40 customers to have good experiences with your brand before you can round up the four customers who can leave positive reviews to balance out any negative reviews you may have.

That’s why you need a program that allows you to offer a compelling “ask” for positive word-of-mouth to build an army of happy customers.

So, what do you do? How do you make sure your chances of launching and running a referral program successfully improve day by day? We have some tips on how to start a referral program that really goes a long way toward strengthening your local marketing efforts.

colorful line illustration mostly pink reads 8 Tips for Starting a Referral Program That Will Improve Local Marketing

How to Build a Referral Program That Takes Your Local Small Biz Global

Build an army of raving fans

Bad reviews happen, sometimes totally your fault and sometimes a bad review can be the result of a customer just having a bad day. But you know when it comes to converting new customers, trust is the key. You need loyal customers if you’re going to create a solid referral program, and obtaining loyalty doesn’t always come naturally.

So, it’s important that you invest time and other resources into nurturing your existing customer relationship. You need an ARMY of loyal customers. Yeah, three five-star reviews is a start, but to the searcher, it’s also going to look like you probably paid for all three reviews.

Let your team live up to their own hype

One thing to keep in mind about referrals is that customers often refer the people in their networks to other people they trust who have expertise in certain areas. Your brand just happens to be the place where your customers can find these trustworthy people. So, consider creating an employee influencer program and having incentives in place that give your team members room to be seen as trusted experts.

Create more touch points after the initial contact

Okay. So, you have a prospect’s attention. Now what? Now, you keep getting their attention, but you get their attention with things that you know interest them. Are they moving into a smaller apartment? Maybe send them an article you saw on the minimalist home decor trend. Every engagement doesn’t have to be an opportunity for you to sell to them. Depending on where they are in the buying journey, your best strategy may be giving them time and space to build trust in you and change their perspective of you from salesperson to trusted expert. Sending personalized emails that focus on the specific interests of a customer helps the customer… which helps your brand in the long-term.

Humanize your brand

Does anyone outside of your office know how hilarious and quick-witted your CEO is? They should. They totally should. Showing your customers what goes on “behind the scenes” can help you create a foundation for relationship-building. A pretty simple way to do this is to get employee buy-in. Have your individual team members (not your marketing department) created their own kind of user-generated content about your brand.

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Make the Referral Process (and its benefits) Super Clear

Now that you are in the process of building strong ongoing relationships with your client base, you may be able to get a better sense for which customers would be most likely to participate in the program by tracking which ones are engaging with your emails.

The next step is to tell your customers about the program. You can do this as the program launches or a few days before. The goal is to make sure they understand how valuable their business is to you, how important it is to you that they continue to have positive experiences with your brand, and how you’ve set up a program to make sure they can benefit from just showing love for you guys.

An simple way to do this is to create a landing page that teaches your customers (existing and prospective) everything they need to know about your referral program and how it works.

The screenshots below are of the Ibotta rebates app. Notice how different referral opportunities are listed along with the brands and other opportunities for shoppers to get rebates… and the incentive is money… totally on-point for a rebate app.

A screenshot from Ibotta rebates app of different referral opportunities by category
 A screenshot from Ibotta $15 referral incentive

Ensure the rules of your program really easy for users to follow and implement. The screenshot on the right details the rules of the $15 Referral Bonus. Your landing page design and the messaging should flow well and be pretty straightforward. There aren’t any bells and whistles on the landing pages for this app because there’s a good chance most of its users are time-pressed shoppers who are really focused on hunting down good deals. So, a simple set of rules with instructions works for Ibotta’s user. No pictures. No scrolling. No clicking.

I think this part is pretty important, but also pretty easy to overlook.If you complicate things or make it seem like there are a bunch of ways for people to refer you and NOT get the reward, not only are your customers less likely to refer you, they’re also less likely to continue patronizing your business.

Minimize complicated phrasing and unclear requests. Clean up your page’s copy to make sure grammar and spelling errors are gone. I think that’s just a general request. Sloppy copy sucks. Spend the extra few minutes to proofread or perfect your messaging with the help of writing tools and services, such as Grammarly, Studicus, Hemingway Editor or BestEssay Education.

Launch Your Referral Program

It’s time to make your program fully functional and shareable on BOTH desktop computers and mobile devices. More importantly, your brands needs to do a concerted push to promote the referral program.

Individual team members should continually promote the referral program by sharing it with customers at the end of calls, adding it to their email signatures, sharing uses cases on social media. Onboarding the first few customers will be easy compared to getting them to incorporate your referral program as part of their shopping experience.

So, include social buttons that allow customers to easily share the program, and give them an easy solution to see the types of things other customers are saying about your brand. But you don’t need a fancy dashboard. Branded hashtags work, too.

You should also have a way of gently reminding them of the value of their referral, whether that’s as a PS in an email, an alert that comes through your app, or just being on the home page of your website or your app.

Leverage the power of influencers to boost brand awareness and make your referral marketing campaigns more effective

You can add influencers to the mix, too to boost brand awareness and get the word out about your brand, your product, AND your referral program, often in the same post. Take a look at this sponsored post by @prettylilthingss1 for Sqrrl.

A screenshot of Instagram post by 'prettylilthingss1' for Sqrrl app.
Source: On Instagram

Continually Optimize the Customer Experience

Even with excellent products and services available, 100% customer satisfaction requires great customer support as well. Use social media as another touch point for your customers and provide them with links to make referrals.

Social media is also a good place to create positive experiences with your customers. We pulled some interesting statistics about this topic from a recent post, 111 MORE Influencer Marketing Stats:

  • Half of all social media users follow brands on social media
  • 71 percent of those surveyed say they would buy from a brand with whom they had a positive interaction.
  • Less than 10 percent of businesses that are on social media are leveraging the tool as a way to meaningfully engage with customers.

Consumers like to be heard and receive responses in a timely manner, so perfecting your customer service approach is a must.

To improve in the customer service department (and protect your brand’s reputation), you should:

  • Maintain responsiveness to high levels – Don’t let a customer’s questions or a comment on social media, for example, go unanswered for a long time. Responsiveness is one of the most important factors in customer support
  • Opt for sincerity – whatever issues your customers might have, be sincere. Choose a friendly tone, be as helpful as possible, and always choose transparency. Sincerity is appreciated by customers whatever the situation might be.
  • Ensure consistency – provide all customer inquiries with equal attention. Great customer service needs to be consistent.
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Personalize Interactions

A personalized interaction will be viewed with much more appreciation by the average customer. Whether you’re emailing them a promotion that suits their preferences, reminding them of a sale, or showing them you’ve remembered something about them, personalization can go a long way.

When customers feel like you’ve taken an interest in their behavior, and you actually act on the data you have on them, their loyalty to your brand will increase, and they will be more persuaded to actually refer you to their friends, family and on review websites.

Give Rewards

At the base of any successful referral program stands a reward system. Going the extra mile for your customers, prospects, and subscribers can make a difference in how successful your marketing tactic actually becomes.

When you are providing rewards, people will take notice, and the word will spread more easily. This will function as an incentive, a little push to show people you are actually worth their time.

Think of options that could determine people to refer, whether it’s a store coupon, a discount, or a freebie. More customers will not only gladly review your business, but they will become fonder of your brand in general.

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Automate

Getting technical with your referral program can help you stay organized and monitor progress. Find a referral software that can help you fine-tune your marketing approach. Choose a software tool that has the following functionalities:

  • Results measurements
  • Tracking campaign results
  • Rewards issuing
  • Automation capabilities

If you work with a software product, you can automate your referral program, save time, stay on track and scale when necessary.

Ask

Don’t be afraid to go for the traditional ask. With a referral program intact, you can invite customers to join. However, because the key here is not to come off as pushy, asking for referrals should be done after positive customer interactions. You can establish and automate an invite process that appears on post-purchase pages, confirmation and thank you emails, or after they’ve talked directly with a customer service representative and solved a situation.

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Bottom Line

A referral program can help you perfect your marketing approach, allowing you to increase customer satisfaction. Adopting this tactic comes with high potential, but in order for the results obtained to rise up to your expectations, you should pursue the right course of action on the matter. If you’ve been looking for guidelines, these few pointers could put things into perspective for you. Keep in mind these suggestions and your efforts revolving around the start of your referral program will pay off.


Bio

Angela Baker is an educator and creative writer from Philadelphia. She graduated from Thomas Jefferson University and started her writing career quickly after. Now she works as an editor and specialist in academic writing at Trust My Paper. She also contributes regularly to websites, such as Huffington Post, GrabMyEssay, The Guardian, and others.

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