Whether you have a referral program, are about to launch one or evaluating its efficacy, it’s extremely important to focus on one thing: conversions. The success of a referral program is based on 4 key steps. This post will walk through how each conversion step can be optimized so your Referral Program reaches or exceeds your target return on investment.
Step 1: Convert Customers into Advocates
Setup an enticing offer or reward: Referrals are valuable, so make sure you properly incentivize or reward Advocates for successful referrals.
- Inform your Customers about the Referral Program: Tell them about the Referral Program at an optimal time, whether this is after they have a positive experience, after they’ve been a customer for 6 months, or simply at the end of every transaction through an automated process, reminding them that you want referrals is crucial.
Establish a step or process on when to ask for a referral & have a simple way to describe the benefits of referring someone. This is the “top of the funnel” so try and convert as many Customers into Advocates!
Step 2: Convert Advocates into Leads
- Make it easy for Advocates to join & share: It should be dead simple for a Customer to refer someone, don’t make it complicated with multiple steps, manual processes or other convoluted approaches. The value is in getting the referral, making it difficult to jump through hoops to get there will reduce conversions.
- Leverage the benefit of your Advocate’s networks: This is the only multiplicative step in the process as one Advocate can refer everyone in their network! Make it simple for Advocates to refer friends & family by email, text message on web or mobile or with other tools that are available to you.
At this stage, a Customer has become an Advocate, use technology, automation & other tools to use the multiplicative network effects to your benefit!
Step 3: Convert Leads into Customers
- Let the selling begin: Once friends & family start getting referred, the selling process begins. Treat these referrals as warm leads, however, each referral may have a very different understanding of your business. Take the time to understand why they were referred & also mention the Advocate’s name who referred them in any conversation to build rapport.
- Be upfront about rewards: If you offer a reward for the friend, ensure to be upfront on how they earn the reward, this goes a long way to earn their trust & convert them into a customer.
Now that you’ve generated warm leads, take extra care to convert them to Customers, as referred customers tend to have a great lifetime value than non-referred customers.
Step 4: Convert New Customers into More Referrals!
- More customers = more referral opportunities: Now that the lead is a Customer, tell them about how the referral program works. The best time to get referrals is after a successful transaction where the Customer
- Don’t forget to say thanks: Take the time to thank the Advocate for the referral & if applicable, provide them with their gift. Don’t forget to remind them that they can keep earning rewards when they refer more people!
Use fly-wheel methodology to turn referrals into more referrals!
