When it comes to getting more business, referral marketing is a powerful tool. Having customers who trust your business enough to give word-of-mouth reviews is worth its weight in gold. As the saying goes, people talk. While you probably don’t care for their gossip, you do care when they talk about your business. With a reported 84% of people trusting recommendations from those they know personally, you can’t ignore the weight of a strong referral marketing strategy.
That being said, referral programs don’t magically fall into place overnight. They take a lot of work to go from ground zero to a raging success. While there’s a proven track record behind the success of these programs, it’s important to consider your own strategy. Essentially, you’re trying to create a customer experience so noteworthy that customers are excited to rave on your behalf. We’ve all had experiences before that are so good you can’t keep them to yourself. How can you replicate this for your own customers?
While you can spend all of your effort marketing to new users, it’s much easier to market to those who already trust your brand. Through referral marketing, the heavy lifting is done for you. Because your prospects know of your brand through those they trust and other similar users, it’s much easier to land conversions. Why not let your best customers do your sales for you?
Now that you know why referral marketing is so essential, how do you get started? While many companies create referral programs, they don’t pay attention to their foundation. This leaves these programs falling flat, costing more money than they’re worth. Keep reading to learn how to build a referral marketing strategy from ground zero.
Increase Your Social Media Activity
First, if you don’t have an active social media strategy, you need to start there. Many of today’s referrals don’t take place in person. They happen on social media. When you post consistently and focus on engagement, you increase your following online. This encourages existing customers to connect with your brand, start a conversation, and shout you out.
The proof is in the statistics. A reported 49% of consumers share their positive user experiences on social media. If you’re not active on social media, you’re missing out on the opportunity to be seen by your current users. It’s simple and free to increase your social media activity. Start by creating a consistent posting schedule, sharing relevant content in your niche, and engaging with your users.
The food delivery service Freshly has over 320k followers on Instagram alone, and their social media presence has paid off. Not only do their own customers regularly share their meals on social media, but they’re always tagged in stories, Reels, and posts. See below how one user shares her excitement after trying Freshly for only a few weeks. It’s this kind of referral magic that leads to conversions.
Survey Existing Customers
Next, talk to your existing customers. What do they love about your brand? Why would they be willing to share with others (if at all)? Most importantly, what can you do to create more brand advocates? If you haven’t checked in with how your current customers feel, you can’t possibly know whether you need to grow.
Don’t assume you know what customers are thinking. Ask them yourself! You can do this in so many different ways. Start with these ideas below:
- Use a feedback survey on your website
- Email existing customers a survey after they make a purchase
- Use social media to collect feedback
- Request feedback on your order confirmation page
- Send email surveys to new customers
When you survey existing customers, you learn what you’re doing well and what you need to work on. Customer feedback is your biggest asset—make sure you’re using it wisely. For example, the grocery delivery service Hungryroot was serious about feedback. They’re always open to new ideas, products, and ways to better serve customers.
To make sure their existing customers feel heard, they created the Official Hungryroot Community page on Facebook. With almost 10k subscribers, this is a space for existing customers to share their ideas, comments, and concerns openly. Their page admins regularly respond to comments, and they’ve built an active space around their brand.
Offer Rewards For Existing Customers
Additionally, make sure you’re focusing on your existing customers. While it’s easy to turn your attention on attracting new customers, your existing customers are the ones who are already engaged with your company. Most importantly, they’re the most likely to make purchases in the future. These loyal customers deserve to feel valued.
How can you reward existing customers? Here are some great ideas:
- Referral programs
- Affiliate discounts
- Loyalty programs
- Free items with multiple purchases
- Tier loyalty system
In other words, the goal is to give existing customers a reason to share how much they love your brand. When you create an exciting strategy for rewarding your current customers, they’re more likely to share your brand with their own circle and beyond.
The online car retailer Carvana taps into rewards programs to generate buzz around their company. When current car buyers refer a friend, their friend receives $500 off their own Carvana purchase. Even better, the person who made the referral gets a $100 check for sharing the love. Carvana’s referral program makes the car-buying process even more accessible, tapping into their mission.
Invest In Your Customer Journey
Next, how do you make it clear throughout your customer journey that you’re in it for the long haul? Some purchases might seem one-and-done, and this could leave customers feeling like you’re no longer interested in pursuing their business. In reality, existing customers are well worth the effort.
To this point, a reported 50% of existing customers are more likely to try your business’s new product. They’re also 31% more likely to spend more than new customers. With stats like that in mind, you need to shift your thinking when it comes to the customer journey. Your customers aren’t sales numbers on an invoice. They’re “partners” in your business. When they’re engaged in your success, they become superfans.
One clear example of this is MeUndies, the online subscription service for underwear. Most adults probably don’t consider buying underwear as something they do for fun, and it’s certainly not a memorable experience. Founded in 2011, MeUndies uses a membership loyalty model to give existing customers discounts and limited-edition items. Through their dedication to the entire customer journey, they built a $32 million company. By making the entire customer journey fun and engaging, they encourage more referrals.
Elevate Your Branding
Additionally, if you want your company to be shareable, it needs to look nice. Nobody wants to share something that feels outdated and stale. Branding is much more important than you think. Research shows you only have 0.05 seconds to make a first impression with your brand. This means your colors, logos, and overall aesthetic need to be eye-catching and memorable.
There is no one-size-fits-all when it comes to your branding. Investing in strong elements across your website, packaging, social media, and in-person store/office is key. You want to be consistent and easy to spot, especially if you’re in a crowded industry. Just take a look at any social media feed and you’ll see elevated branding in action.
A prime example of this is Curology. This customizable skincare solution stands out from other skincare options simply because its branding is so eye-catching. The simple colors, font, and minimalist packaging makes these products feel luxurious and sophisticated. Whether you’re scrolling their community pages or their Instagram, it’s easy to notice Curology’s unique branding. This makes users more excited to share their new products on social media.
Increase Your Communication With Existing Customers
Moreover, increase your communication with existing customers. This is especially true for customers who haven’t made a purchase in a while. Thank these customers for their support, and ask for their insights. A bit of communication goes a long way to re-engage these customers.
How can you re-engage these customers?
- Offer a special discount
- Abandoned cart emails
- Thank them for their support
- Ask for feedback
- Share a freebie
- Link to top content
Consider ways you can give value to these existing customers, and make sure they feel appreciated. When brands nurture connections long-term, customers know they’re more than a sales number on a page. Thrive Market encourages those who have signed up but haven’t made a purchase to give them a try with a special 30% discount. Not only does this make a personal connection with the user, but it also is an enticing offer.
Streamline Your Communication With Potential Customers
Next, focus on streamlining your communication. When you communicate well, it’s easier to land sales, deliver a quality customer experience, and secure referrals. There are so many different ways to communicate with potential customers, from social media to email.
Consider where your audience spends time online. How do they prefer to be contacted? Whether it’s through text message, social media, or email, ask what they need from you. The more streamlined your experience with potential customers, the less friction they face when converting.
The digital media giant Buzzfeed mastered how they communicate with potential customers. They know their millennial audience responds best to customized email communications, and that’s why they created this easy signup tool. Potential readers can choose exactly what they’re interested in, guaranteeing their inbox is curated to their interests.
Build Referrals Into Your Sales Process
Another important part of building a referral marketing strategy is building referrals into your sales purchase. While some customers might feel compelled to refer someone, most need a bit of a push. Always make it a habit to ask for reviews, referrals, and testimonials. Sometimes all it takes is a simple reminder.
When referrals are built into your sales process, they come naturally. Give your users as many opportunities as possible to shout out your brand and share their experience. Along the customer journey, ask for feedback, shares, and anything that generates buzz around your brand.
The vitamin company Care/Of takes referrals seriously. At each stage of the process, customers are invited to share a membership with their friends. Not only can current users earn free vitamins, but they can easily share a link or email to someone they know. It’s all about making referrals as simple as possible.
Always Drive With Data
Last but not least, lead with data. If you want to build a referral marketing strategy from ground zero, start with the data you have and continue learning. Survey results, customer feedback, and experience metrics are vital to your referral process. Do your best to track key customer service metrics at every stage of the process.
Don’t rely on assumptions. While you might think you know what’s best for your customers, it’s better to ask them yourself. Your existing customers know your strengths, weaknesses, and how you can improve. They’re the greatest asset you have.
The movie theater chain Regal asks their Regal Crown Club members for feedback after every movie experience. As the most engaged customers, Regal Crown Club members take the movie theater experience seriously. These users are a great source of feedback, and it helps Regal stay on top of current metrics.
Land More Referrals for Your Brand
Ultimately, you can build a referral marketing strategy only if you have the right strategy. Though it might seem like it, referrals don’t appear out of thin air. There’s no secret formula or magic wand. Instead, it takes the right foundation and a commitment to the entire customer experience.
When customers feel heard, valued, and appreciated, they want to share their experiences. These customers know they’re more than sales numbers. They’re real partners in your success, and they’re raving superfans. Not only are they excited to keep purchasing from you, but they want to share their experience with their own circle. When you leverage the power of referrals, you take your company to new heights.