Killer Strategies for Referral Marketing
The concept behind most of these strategies is that of "fewer degrees of separation". For example, if you are a stranger in a new town and you’re looking for a company, would you prefer to check out the Yellow Pages or get a referral from one of your friends? Referrals are more convenient because they save time, energy and enrich relationships. From the marketer’s perspective they are cost-effective and quick. With this in mind, let’s take a look at some excellent strategies and tips for increasing the impact of your referral marketing strategy.
#1 Identify Qualified Referral Sources
It all starts with the right question: “Who can send me relevant prospects?” Interestingly enough, the most qualified referral sources are usually businesses that have the same target audience as you. Of course, this doesn’t mean that if you own a clothing store you can start collaborating with another clothing store.
The idea is to start collaborating with non-competing businesses with similar audience. Think service providers, industry associations, and influential individuals, thought leaders or service firms. Also think about your audience Demographics: How old are they? Where do they come from? What gender are they?
All your marketing efforts should develop according to specific plans. They should be designed to motivate and educate your audience. This can be done by discussing with influential clients, getting your message across to the right people and reaching out to other businesses. If you decide to interact with certain influencers you should make sure that they are professional, solid and reliable. Ideally, you should pick influencers who are relevant to your industry and who only promote products that they actually believe in.
Don't rush into making a sale. Referral marketing is all about building relationships and rewarding customers. Immediately starting to gush about your business will demonstrate that you are interested in nothing more than generating sales. A successful referral marketing strategy takes time to create. In other words, you will have to go for the long-term approach: reach out to thought leaders, share their content, learn more about what they like and what they are interested in etc. Successful conversations usually begin with "Would you know anything about…"
Relevancy is one of the most important elements of marketing success. Try to be useful to others by answering questions and proving genuine interest in their problems or suggestions. If they feel that you are personally interested about their situation they will feel closer to your brand and be more likely to start referring to it.
#2 The 80/20 Rule
If you were a client, would you rather receive a cold call from a company you never heard about before, or would you prefer to receive a highly qualified lead from a friend or colleague? Don’t answer that. The 80/20 rule applies to most successful service firms, where roughly 80% of customers come directly from references. The problem is that the remaining 20% percent, which is usually obtained through traditional marketing strategies, takes up 80% of your marketing efforts to secure.
Instead of focusing on cold-calling, boring emails etc. you could try to find out the reasons why people like and purchase your products in the first place and put referral programs into place to validate their decision. There is no limit to how many referrals you can make. As long as you keep providing high-quality services, referrals will only continue to grow in number.
#3 Send Tokens of Appreciation
You should always treat your referrers and customers with the utmost respect. They will only refer to you if they feel special. Reward programs may work with some businesses, but they don’t fit some rather personal services. For example, you may not be able to offer credit for an accounting service, but you can still show your gratitude for the referral.
According to Matthew Reischer from LawyerReviews, people are more likely to refer if they know that their efforts will be appreciated and repaid through rewards. If you want to take things to the next level you can reward the referrer with something he actually needs/likes.
Referrals don’t always have to end in a purchase. There are situations when people are interested in a product but they will simply not buy it in the end. This is where follow-up mails come in handy. Studies show that follow-up emails usually result in purchased. Even if they do not lead to a purchase, they can create a good impression about your business. Your goal is to leave a lasting impression.
Even if a prospect does not convert he has the potential of becoming a referrer. If he liked a product on your page but didn’t complete a purchase, you could offer a sizeable discount for that item to encourage a referral. These are examples which can apply to any type of situations.
Sometimes, thanking a customer for a referral is enough to make him feel special. Call it business etiquette if you want. Even the smallest token of appreciation can create a good impression.
Take Care of your Referral Sources & Giveback:
1 - What are your goals?
2 - How can we help you?
3 - What are your foreseeable challenges?
4 - What would you like to learn?
5 - Who can I introduce you to?
You can use these questions to find out more about your customer’s needs. Once you find out what exactly is important to him you can provide non-billable advice, join his community, facilitate productive introductions, support his online efforts etc.
#4 Showcase your Best Clients in Case-Studies, Presentations, Articles etc.
Gamification is extremely effective in referral marketing campaigns. It refers to a human’s desire to compete and be rewarded for his achievements. The idea is that people have the attention span of gold fish online. In other words, if you look away for one moment chances are that you will lose a prospect. This is exactly why your customers must be constantly reminded and encouraged to act.
One of the best gamification strategies represents showcasing your clients in various case-studies, articles or presentations. This will help you make clients more visible while also adding more credibility to your brand. The ideal situation would be to capture an influencer which would lead to “unsolicited endorsement” on your side.
Another strategy here would be to interview industry experts. Chances are that the expert will mention your interview after it is made public. This will instantly bring relevant traffic to your site and also help you educate a new type of audience about your services and products.
#5 Invest in Online Videos
Video content is watched and shared online more than any other type of content. As of February 2015, 182 million Americans watched over 50 billion online videos. In addition to this, over half of NetBase’s survey responders said that they share videos online. In other words, video content will give you the opportunity to organically share information about your brand across different networks while also increasing credibility.
Video content is easy share. Have you ever considered including a referral link in your video description? For example, you can create a short preview for a new product and offer it as a prize for those who refer to your company. Add the program’s details in the description and watch your video go viral.
#6 You Have to Give to Receive
Brian Basilico, of B2B Marketing, says that you should give referrals before you can get quality ones back. He also mentions that good referrals will probably not arise immediately, but referring to other businesses will get you noticed and open new opportunities for engagement with relevant brands. Let’s say your client is telling you that he needs a certain something. That certain something can be a referral you make for another company. So you are not only opening doors but also solving the customer’s problem.
#7 Always Exceed Client’s Expectations
Truth be told, referral programs will only work if your services and products are top-notch. Nobody will ever refer to mediocre companies. This means that, in all you do, you must exceed a client’s expectations. Eddy DeMelo, a successful SEO consultant advocates for the importance of going above and beyond for a customer.
After you have satisfied his every need you can ask for a referral. It’s incredible how many people are willing to make a referral if they are satisfied with a service.
Example: if you are positive that you delivered stellar services, you can wait for the transaction to be complete and send a personalized email. Simply ask for the referral but don’t forget to mention the benefits of making one.
#8 Bringing your Referral System Full Circle
All of the strategies above will help you polish your referral conversion strategy. To keep things moving in the right direction you should also determine a follow-up strategy that will bring even more referrals to your services.
To do this you might want to follow these steps: (1) determine a way to continue marketing to your referral leads that take action immediately and (2) continue communicating with your referrals and inform them about their progress to keep them motivated. For the second step, acknowledgement can go a long way.
Measuring Results: Monitor & Optimize Performance
We mentioned the importance of optimizing a program several times during our guide. The most successful brands are constantly testing out new things such as promotional placements, default messages, remarketing strategies etc. Their strategies aren’t left to chance.
They are usually monitored with the right type of analytics and reporting tools. With access to performance programs businesses can understand more about the referral tunnel, what strategies are working, performances of sharing channels etc.
As far as effectiveness measurement is concerned, it is very different from traditional marketing programs. To correctly estimate the level of participation and success of a referral marketing campaign you should take into consideration engagement, sharing rate, clicks-per-share, total number of shares and conversion rates.
Referral Funnel Effectiveness measured by: shares/advocate, friend clicks, new conversions/conversion rate, and advocate participation.
Back to Table of Contents