How did you find your favorite brand?
More importantly, what makes you stay loyal to that brand?
In order to maximize long-term profitability, small businesses need to understand what makes new and existing customers stay loyal to their brand even after they’ve made a purchase.
With more than 70% of companies depending on existing customers to fuel business growth, an ounce of loyalty is worth a pound of cleverness in the world of business. Brand ambassadors spread brand awareness through social media and word-of-mouth marketing. This is an incredibly valuable marketing strategy considering consumers trust friends and family recommendations more than brand-created ads
For this reason, brand ambassadors offer a higher lifetime value than any other type of customer. To gain loyal customers, you can set up a customer referral program.
What is a customer referral program?
Customer referral programs reward existing customers for spreading the word about a brand or product with friends and family. Whereas loyalty programs are a tactic for driving repeat purchases from existing customers, referral programs aim to attract new customers via existing customers’ nearest and dearest.
Customer referral programs nurture and leverage your most loyal brand ambassadors by building vital trust and loyalty from deep within. It’s similar to nurturing employee advocacy using an employee reward program. You can quickly process payroll to deliver employee advocates with monetary rewards for sharing branded content.
Why is a customer referral program important?
Once you’ve put a solid referral system in place, you can sit back and let satisfied customers do the work for you. But don’t rest for too long! Customer referral programs allow you to glean valuable insights. Discover customer wants, expectations, motivations, and pain points to smooth out the customer journey further.
Offering mutual benefits for senders and receivers, other perks to implementing a robust referral program include:
- Increased conversions and sales revenue.
- Increased ROI.
- Improved lead generation.
- More brand reach.
- Shorter sales cycle length.
- No upfront financial commitments.
- Customers feel recognised and appreciated.
If you’re reviewing your system’s effectiveness, efficiency, and economy of operation, an operational audit may be advantageous. So, for example, performing an operational audit on your referral practices to gauge their effectiveness. See more examples of operational audits here.
What are some examples of successful referral programs?
To gain a better idea of what a successful referral program looks like, here are a couple of prime examples to help shape your referral program.
Tesla Referral Program
Topping the list of most satisfied customers across the entire auto industry, Tesla has an evolving customer referral program. Adaptable and forward-thinking, Tesla has taken reward referrals up a notch by steering away from the standard product discounts.
From offering cash bonuses to getting your photo launched into Space and more, their latest referral program allows users to earn referral credits when friends or family use a referral link to order their first Tesla product.
Google Workspace Referral Program
Google understands that business users and individuals have different motivations. Businesses may be more concerned about whether Google Workspace integrates with Vonage small business phone services, for example, to streamline communication. Individuals may desire user-friendly integrations with their social apps.
The referral program unites these desires to create a harmonious customer and client acquisition referral program.
In exchange for recommending Gmail, Google Meet, and more, Google’s current referral program offers cash rewards for eligible users and referred user savings on the first year of membership.
Which tactics should I employ to increase customer loyalty?
B2B customer referrals contrast with B2C customer referrals. B2B referral programs encourage satisfied customers to endorse your brand to decision-makers at other businesses. B2C referral programs incentivize existing customers to introduce your brand to their friends and family.
B2B customers are typically focused on financial gain, whilst B2C buying motivations are more emotionally driven. However, similarities lie in that both B2B and B2C referrals require a strong sense of credibility to create trust with potential referrals.
So, no matter whether you’re building a B2C or B2B customer referral system, here are the five main tactics needed to build a systematic referral program.
Define your referral program goals
Question: What do you want your company to gain from this program? E.g. to increase conversion rates by 20%.
Ensure: That your goals and metrics are cemented before launching the program.
Benefits: Attract new customers who are the best fit for your brand.
Decide on incentives and rewards
Question: What incentive will motivate your existing customers to recommend your business?
Ensure: That you conduct thorough research to really get to know your customers and stay within budget.
Benefits: Tap into customer interests and select tempting referral program rewards.
Create an eye-catching landing page
Question: How can I make a good impression?
Ensure: That the content is clear and on-brand. Provide multiple channels to spread the word. Create single-click referral links for ease.
Benefits: More chances for customers to share your brand and products.
Manage & maintain your customer referral program
Question: What tools will help manage your referral program?
Ensure: That your referral program software can track referral links, A/B test marketing campaigns, interpret crucial success metrics, and measure conversions.
Benefits: Maintain customer relationships.
Similar to the way payroll services automate payroll, referral program software helps to streamline and automate referral management with ease.
Promote your referral program
Question: Which communication channels will spread the word best?
Ensure: That your messaging is consistent across platforms.
Benefits: Accelerated business scalability.
You can also use employee referral programs to encourage existing employees to recommend candidates for open positions. However, exempt staff are typically exempt from referral bonuses. Learn more about the difference between a non exempt vs exempt employee here.
10 referral program ideas to attract customers
To help you stay ahead of the competition, here are a few ideas to start those creative juices flowing.
- Cash rewards
- Service upgrades
- Money off a subscription
- Referral competitions
- Seasonal referral incentives
- Charity donation
- Referral point system
- Gamified referral programs, e.g. referral leaderboards.
Nurture Loyal Brand Ambassadors with a Robust Customer Referral Program
Bombarded with an untold number of ads each day, authentic referrals from trusted friends and family will always stand out amongst the sea of generic ads.
So, what are you waiting for?! Follow the points outlined above to craft a concise customer referral strategy that effectively boosts brand awareness and new sign-ups. You never know, it could even help your company go viral! Nurture customers who create customers and watch your business soar.