When you’re seeking out a new restaurant, looking for your next binge-worthy show, or searching for the perfect pair of shoes, what do you do first? Prior to your own research, you’ll likely ask your friends and family for their recommendations and put your trust in their suggestions. This is essentially how a referral program works! A referral program is a low-risk, high-reward marketing tactic that relies on word-of-mouth referrals. Existing customers will direct their friends, family, and peers to your business in exchange for an incentive. They’re a great marketing tool because they can broaden your customer base and create ongoing revenue. Keep reading to discover additional benefits of referral programs and tips on how to get one started!
Benefits of a Referral Program
Companies utilize referral programs for three main reasons: they’re beneficial for attracting new customers, they establish trust, and they boost revenue. In addition to all of this, referral programs are a very cost-effective marketing tactic when done properly. This strategy allows you to reach new users simply through word-of-mouth recommendations from current, happy customers—your only expense will be the cost of your incentives. On top of that, they build trust in your brand. A potential customer might be more receptive to a friend’s recommendation over anything else. Both of these benefits inevitably lead to more traffic, sales, and success for your business.
Determine the Incentive
Before creating a referral program to attract new buyers, you must decide on incentives that are most likely to drive your current customers to recommend your business. First, determine your budget and ensure that you stay within it so your referral program doesn’t end up costing you to lose money. Incentives can be anything from discounts to free products and everything in between. Provide a service? Service upgrades are highly coveted. Branded swag like koozies, apparel, or stickers are also a great option for any business—plus, it’s free advertising!
Once you’ve figured out the logistics of your referral program, all that’s left to do is promote the heck out of it! You’ll want to promote it on every channel consumers see. This could be via your website, social media platforms, emails, or by sharing the details with your customer service team to relay the information. Whatever you choose, just make sure it’s consistent across the board.
Referral programs are a powerful tactic in today’s marketing world. Whether you’re looking to gain new customers, build trust, generate revenue, or all of the above, referral programs are the way to go!