7 Steps to Launching a Successful Referral Program

What makes a successful referral program? Why do some programs get thousands of signups while others are just forgotten? Well, it is all about knowing the right steps to launching a successful referral program. It is not enough to just create a referral program and launch it. You also need to know how to promote it. In this article, you’ll learn the 7 steps that you can do to launch a successful referral program.

 

What is a Referral Program?

But first, what is a referral program? A referral program is a system where customers or website visitors are given a chance to refer people to the website. Often, it includes a form that doesn’t only ask for the email address of the user but also has a place for the contact information of referrals. This system allows website visitors and customers to refer their family and friends to the website in exchange for a reward.

Why is Referral Marketing so effective?

Referral marketing is effective because it utilizes the circle of trust. Unlike normal marketing where you promote your products to cold prospects, referral marketing let website visitors and customers promote the website to their circle of trust. This is their family and friends who are far more likely to act on the promotion. Unlike cold prospects, family and friends are considered warm prospects. This means that they are far more likely to do what the referrer asks them.

 

Fortunately, launching a successful referral program in your business is easy. Here are 7 steps to creating a referral program that can bring you more traffic and sales.

 

STEP 1: Look for Referral Program Inspiration

A successful referral program starts with some inspiration. You need to look at what successful brands are doing before you can create your own. Trying to create your own referral program blindly is a grave mistake.If you do that, you’ll find that your customers will hardly pay attention to your program. This means that there will be no new visitors and sales for you. It is very important to look at other referral programs to see what is working.

 

What can successful referral programs teach you? First, it will give you an idea on rewards. A common assumption is that you can generate a discount code and put that up as a reward for your ecommerce website. While that can work if your site has a considerable amount of traffic, it will hardly work if your site is new. You’ll find that successful brands have creative ideas on rewards and you can pick some of those ideas for your business.

 

Where can you find successful referral programs? You can start by looking at the top referral programs on the Internet. These are brands like Best Hunting Bow Lab, Uber, Airbnb and PayPal. If you have wondered how these brands grew their business, the answer is referral marketing. They simply offered rewards to anyone who will refer new customers to their website.

 

STEP 2: Structure Your Referral Program

Another thing that you should consider when creating a successful referral program is structure. It is how well your program is portrayed and understood that will translate into its success or failure. For this, you need to decide on the mechanics of your program.

 

First, you need to determine your reward. This can be a discount code, a free product or a cash gift. The right reward ultimately depends on the needs of your target market. Paypal, for example, gave some cash away for new signups. Since the company is a payment processing system. It needs to give a reward that is compatible with its system and cash is perfect. Uber, on the other hand, gave away free rides and incentives to both riders and drivers. It is their way of growing their community and introducing new members to their platform.

 

Once you have the reward out of the way, you now need to determine who to reward. For this, you’ll need to look at two actors: the referrer and the friend. The referrer is the main action taker. His role is to promote the referral program to his family and friends hoping that one of them signs up. When their friends sign up, they get a reward. The friend, on the other hand, is the referred person. Instead of promoting the program, his role is just to respond to the referrer and sign up. This action can also be rewarded thus encouraging the friend to sign up through the referrer’s link. Ideally, you’ll want to reward both the referrer and the friend for it eliminates all friction and apprehension in signing up. But it may not be feasible if you are working on a limited budget.

 

Once you have decided, it is time to write everything down and load it on a referral software. 

 

STEP 3: Use Referral Software

The easiest way to create a referral program is to use software. If you are trying to code your own referral program, that’s okay. But it will take a lot of time. Using referral software will help you create a referral program quickly and effortlessly. In fact, all you need to do is load the information that you have created in step 2 and create a referral program with a click of a button. It works like a Shopify affiliate app.

 

But that’s not all. Referral softwares are also great tracking tools as well. Not only can it help you create your own referral program. It can also help you track how well your referrers are performing. A referral software gives you a dashboard where you can see how many referrers you have gained and how many new referrals they have generated. It will give you an overview of how well your referral program is doing.

 

Also, it can help you with payouts. The problem with coding your own referral program is that it can be hard to keep track of referrals. Doing that manually is enough to drive you insane. A referral software helps you have a page where you can see all the rewards and payouts that you have to give away and you can pay everything with a single click.

 

STEP 4: Promote Your Referral Program

Once you have created your referral program using referral software, it is time to promote it. Many ecommerce sellers make the mistake of only creating the program and forgetting to promote it. Your customers deserve to know that there is a chance for them to get freebies or discount codes. You just need to inform them about it.

 

An easy way to promote your referral program to your existing customers is to put it in the announcement bar of your website. Ecommerce websites often have an announcement bar. In here, you can promote the reward of your referral program and give them a link to your referral page. This may seem simple but it is very effective in letting your customers know that you have a referral program.

 

NOTE: Want to know more about ecommerce? Listen to this ecommerce podcast.

 

Another way to inform your customers is to send an email. If you have been asking your customers to sign up with their email after buying from you, then that’s good. This means that you have a list of customers that you can email. When you do this, you give them an opportunity to get a reward by simply referring new people to your website.

 

STEP 5: Use Influencer Marketing

But there are other ways to promote your referral program. You don’t have to do it just inside your website. In fact, it is important to work with different content creators particularly influencers to boost your referral program.

 

Here’s why influencer marketing is so effective. The old way to do online marketing calls for the submission of your website link to different websites. This is done so that your website can be seen by your target market. The idea is to go where the market goes. However, the drawback to this approach is that it is highly targeted. Posting a link to websites is not enough to get the attention of your prospects. The likelihood that they will click on the link is very small. If you compare that to influencer marketing, you’ll find that influencer marketing is more effective. This is because the promotions of influencers are highly targeted. They gained their followers out of creating quality content. So if you ask them to promote your products for you, all of their audience will see only you. And since they see the influencer as their friend, they are far more likely to act. In this way, you can see that it is quite similar to referral marketing. It uses the power of trust. Since the influencer is a trusted individual, he or she has a greater chance to convert prospects into sales.

 

How can you get an influencer to promote your business? There are many ways to do this. A direct way is to ask them for a product review. You can ask for their address or PO box and send them a product that they can review. It is important not to require them to review your products, simply tell them that they can share the product to their followers if they liked it.

 

Another way is to host an event or contest with the influencer. This can help you increase your followers and have your name alongside the influencer’s. With this, you can have an online contest or an offline event. You’ll see many influencers working with different brands. You can then approach an influencer to work with you in promoting your referral program.

 

The key is in leveraging these people who have the capability to not only convince but propel their audience to take action. Ultimately, it is the action that you are after. It is not the number of visitors or subscribers but the amount of sales that determines if your referral program is a success.

 

STEP 6: Get Creative in Your Marketing Campaigns

It is important to think of other creative ways to promote your referral program. One way to do this is to let your business support a cause. This way, you are doing business for more than just money. You are also serving a cause.

 

Another way is to invest in your commercials or video content. You need to give the audience something that is worth sharing. This is the only way to you create viral campaigns. Viral campaigns are good for it will help you get more people into your referral program.

 

STEP 7: Track The Performance of Your Referral Program

How can you know if your referral program is a success? That’s simple. You track it. Using referral software, you can track how well your referral program is doing. You’ll see how many referrers you have and what they are doing. You get to see how much sales the program is able to generate. This will then help you determine if having a referral program is good for your business.

 

I hope this article has helped you in learning how to create your own referral program. Hopefully, it also sparked some ideas on how to promote it. There really is no right way to promote a referral program. You may need to go back to examining your audience for you to know what they truly need. What makes a referral program successful is not just the structure but the reward. It should be attractive enough that referrals are encouraged to sign up. From here, you just need a marketing method to funnel more people into your referral program.

 

Are you ready to create your referral program? It is simple but have tons of benefits. Take advantage of referral marketing today and get more traffic and sales to your website. The best part is that you don’t have to deal with hefty advertising fees. Your website visitors and existing customers will do all the promotion for you. I guess that is the magic of referral programs. It mobilizes the website audience and allows them to be part of the growth of your business.

About the author

Vikash Kumar is an Online Marketing Manager at Tatvasoft Australia, an Enterprise level Mobile application Development and Software development Company in Australia. Apart from his profession, he also has a passion of blogging in which he shares his expert advice on Enterprise Solution and cloud services.

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
CAPTCHA
This question is for preventing automated spam submissions.