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How to Influence Customer Behaviour to Increase Referrals

In Nir Eyal & Ryan Hoover’s new book, Hooked, they use the Fogg Behavior Model (the “Model“) to understand how the most successful technology’s have succeeded in forming “habit building products”. In this post, we’ll aim to help you understand how you can use Motivation, Ability & Trigger to influence the behaviours of your Customers, to ensure that your referral program succeeds.

Behavior = Motivation x Ability x Trigger
Motivation: The key motivations for a referral program are driven by the rewards that are offered. Understanding your conversion mechanisms, lifetime value of your customers, your current cost of customer acquisition & applying those ratios to your reward structure will drive the necessary motivations. In this manner, we recommend including rewards for both the Advocate & the Friend to motivate both parties. In addition, we recommend being upfront to the Advocate about the reward they will receive (ie. don’t bury the lead). For example, Uber’s referral program is wildly known as one of the most successful, and they motivated their Customers by constantly hammering home the idea of  “Free Rides” for Referrals. They motivated their Riders by offering them a great reward of free rides.
Ability: Implementing technology & reinforcing in the Customers mind the ways to refer are integral here. When a Customer has a referral that they are ready to make, the “Ability” property is the easiest to control, as a simple process should allow them to complete the action of referring a friend or sharing on their social networks. Similarly, the Friend who is told about the referral offer should just as easily be able to claim the reward & not be taken through a series of tedious steps or requirements.
Trigger: This should really be referred to as Triggers. At ReferralMagic, we focus on the terminology “Be Top of Mind, All the Time” so here are some triggers we recommend to ensure success
Triggers to remind Customers to Refer their Friends:
– Featuring referrals on your website
– Including a link to referrals in your email footers
– Including signage and POS stands at checkout advertising the program
– After a positive client interaction, send the Customer a direct email about referrals
– Create social media posts & email newsletters highlighting the program
– On the phone or in person, ask happy customers for referrals
Triggers to turn Referred Friends into Customers
– Email follow ups after they are referred with the information about the referral program & your business
– Social proof of who has referred them “Ie. Sarah Jones thought you’d like our services!”
– Feature the reward they will receive, if any, by claiming this offer

At OneLocal, we use our own ReferralMagic system & incorporate the b=mat model to drive referrals for our Platform, here’s how
Motivation: We motivate both sides of the Referral transaction by providing a $100 Credit to the Advocate & a 10% discount to their Friend
Ability: The Referral Program is embedded right on our Merchant Dashboard, so at any time a Merchant can refer another business.
Trigger: We provide multiple triggers to ask for Referrals including asking happy customers for referrals and highlighting the referral program in our email newsletters.
We hope this post helps you understand the items that drive the behaviours of referrals from your Customers. If you have any questions, or would like to learn more about how you can improve your referral program, we’d love to connect!

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