Despite how Tech has revolutionized marketing, with new trends and strategies emerging daily, word-of-mouth marketing remains the most effective form of marketing. People are more likely to choose you on the word/recommendation of someone they know than a million things you say about your brand.
Why?
Because they have a relationship of trust with that person. People will view your brand with the value they accord to that person’s word on every other issue, especially when the person is seen as an expert in that field.
It is why toothpaste brands would use dentists in their adverts. If your dentist recommends a particular toothpaste, it will take heaven and earth to stop you from buying it. You already trust that brand to deliver on the word of your dentist.
Retention vs Acquisition
One of the juices of investing in Customer retention and loyalty as much as you pay attention to acquisition is that it is, firstly, cheaper to retain customers than acquire new ones. Loyal customers also drive customer acquisition as they would somehow talk about your brand and recommend it because they trust your brand.
However, you should not just leave word-of-mouth marketing to the discretion of your customers. You should have a system that drives your customers to talk about you. This system is known as a Referral program.
What is a Referral Program?
A referral program is a system where a brand uses incentives to encourage people to recommend their products to other people. That way, growth is fast, cheaper, and organic. Plus, you would be able to get actual paying customers.
But just because you are offering a reward for a referral does not mean people will jump at it. If not done well, a referral program can even cost you customers or bring customers who just came for the reward and will not transact with your business. So here are seven tips on how to get the most out of your customer referral program.
1. Your goals must be clearly defined: this way, you will be able to measure the success of the program, the resources to engage, and the reward system to consider.
2. Do not force customers to refer: the idea is to encourage customers, not hold down their necks to recommend your brand. Not every loyal customer will talk about you. While some will carry your brand on their head, some will seldom mention you.
3. Offer a reward commensurate with the task: if your program has a set of tasks to be completed to get the reward, make sure the reward is good enough for the task. Otherwise, no one would engage in the program.
4. Have a system on the ground to accommodate the influx of customers: many times, customers come from referrals but leave with a different impression because you do not have a system to cater for them. So, while word of mouth will bring them, the work of keeping them still falls on you.
5. Have clear instructions: if you have a set of tasks for your customers to complete as part of the referral program to qualify for the reward, list them out clearly so that you will not have disgruntled customers who will not only leave your brand but also make it their mission to take other customers with them.
6. Do not over-promise: while the reward should be good, do not promise what you cannot give or what will cost you more than the lifetime value of customers the referral program will bring in. The goal is to increase profitability, not run at a loss.
7. Have a time frame: while you can refer programs running for a long time, it is always good to have an end date in mind or the milestone that would signify the end of the program. It could be when you reach 50,000 users or a 30% increase in profit. In the end, it boils down to how much you are willing to spend to achieve your goals.
Must it involve money?
Well, not necessarily money. But you have to give some value to encourage your customers. And most of the time, this costs money.
At Redbiller, as part of our efforts to reward our customers, we have a Business Advocacy Program to reward our customers for referring Redbiller to businesses. Kindly send a mail to [email protected] or call 09168574047 to learn more about the Business Advocacy Program.
