Word of mouth is the best form of advertising. Instead of wondering whether product descriptions are accurate and fair, prospects can read the opinions of people who have actually purchased the product. It is even more believable if the respective customer is a friend of the prospect.
This is, in a nutshell, how customer referral programmes work. Once a customer has made a purchase, they are asked to recommend the product to their friends. Should one of them make a purchase, the original customer gets a bonus or a discount on a future purchase.
Most customer referral programmes are created in the manner described above. But not all of them work. Why is that? After all, the goal is the same. However, not all companies put the right ingredients in their recipes. Like baking a cake, the end result doesn’t depend on the chef’s intent, but on what ingredients they actually put in the cake.
We want you to be able to craft customer referral programmes that really work, so we have put together a list of the best ingredients to use:
- Start at the Right Time
Timing is everything in customer referral programmes. You don’t want to hurry up and ask people for a referral immediately after they complete the transaction on your website. Also, you shouldn’t put it off too much, for days or weeks after the purchase.
The right moment is when the customer is absolutely happy with their purchase. For instance, they post a 5-star review for the product they purchased on a website. Or they fill in the customer satisfaction form after the purchase and give your product the highest mark. This is when you can ask for a referral and be certain that you will get it.
- Make the Deal Sweet
Do not forget that whenever you ask for something, you should offer something in return. No matter how happy and delighted the customer is, they will still ask themselves, “What’s in it for me?”
The incentive you offer must be worth their while. For instance, a discount for a similar product to the one they purchased is not really attractive. To make the deal sweet, you can offer a generic discount code, to be used for any product they want.
- Make It Fun to Participate
What is the good of a referral programme if it is no fun for the participants? Successful companies with thriving customer referral programmes have understood the importance of the gamification factor.
When people play games on their mobile phone or the computer, they have to reach goals, unlock secret codes, accumulate as many points as possible, etc. All of these elements can be easily included in a customer referral programme. For instance, the customer gets X points for a social media share, Y points for an email referral to a friend. You can create various discount tiers and other fun activities which will entice your customers to join your programme.
- No Hidden Catches, No Dirty Tactics
Above everything else, you have to be transparent and honest in your customer referral programmes. Do not change the rules of the game without proper advance notification. Do not collect and use personal data without their approval. And do not leave them wondering whether you actually add up their points and grant them the promised benefits.
In an age of internet scams, you have to be above suspicion at all times.
- Honours as Due
Some of your customers are more active than others in the referral programme. They have brought you a lot of leads. They are actively sharing your social media posts and their purchases. They write lots of positive reviews.
Even if they do not ask for special favours, give them a little royal treatment. Offer them special discounts, remember their birthdays, remember their anniversaries as your clients and go above and beyond regular incentives to keep them loyal.