Referrals are the lifeblood of sales success. They are the ultimate "social proof" because people trust friends and influencers more than any advertisement delivered by the brand.
A referral is someone who has a personal reason to check out your brand and who approaches your products or services with a positive-leaning curiosity. They may even be a pre-qualified lead if the referral itself was based on personal knowledge.
Therefore, inspiring and rewarding referrals is a process that every brand should master. In this post, we'll break down a five-step plan to consistently generate a high volume of quality referrals. Here's how to create a smooth-running referral machine.
Step 1: Identify Your Best Referral Sources
Know your audience. Use referral tracking and activity analysis to determine which customers or partners send the most referrals and which send the highest quality referrals.
Dive deeper into their behaviors and the specific referrals they send to discover what motivates these referral super-stars to refer you to their friends, family, colleagues, or personal audience. Once you have these answers, you can focus your referral efforts on these proven sources and generate more referral sources like them.
Step 2: Make it Easy for People to Refer You
Make referrals easy. Consider how many more casual referrals you could collect if referrals were one click or card away.
- Create a referral landing page on your website with an easy-to-remember URL
- Distribute brand-styled QR codes that lead back to the referral page
- Provide referral cards with contact info pre-filled with every product sale
- Dedicate an email address and online forms for referrals
- Include referral links in email campaigns
- Create a referral hashtag on social media
Using a variety of quick and easy referral resources, you can facilitate your audience to spread the word casually. Meet them in their favorite channels and make referring truly effortless. Easy referrals can be distributed quickly, like a friend sharing a candy bar without interrupting the flow of conversation. You want referrals to be that smooth.
Step 3: Reward Referrals with Incentives
Referral incentive programs make sharing your brand rewarding, whether someone refers just one good friend or everyone in their network.
Offer discounts, gift cards, cash bonuses, or loyalty points as a reward for each referral. Remember to give a reward to both the referer and the referee so that everybody wins when a referral results in a conversion. This will reward your top referrers for racking up the points and encourage even your timid clients to share referral rewards with their friends.
For those who go above and beyond, publicly recognize and celebrate your top referers. Some people live for high score status, and you want them on your referral team. Create grand prizes for high-scoring referers, from valuable items and packages to VIP attendance at company events.
Step 4: Nurture Referral Relationships
Ensure your referral program remains rewarding and motivating by nurturing referral relationships. Create an onboarding email experience for newly referred customers and keep your referrers engaged with regular updates and thank-yous.
Share customer success stories and spotlight people with interesting referral experiences. Audiences love personal stories, and customers may engage in your referral program to see their own stories featured.
Your top referrers should also be valued and treated like VIP clients. After all, they're not just customers anymore. They're volunteer brand ambassadors.
Step 5: Measure and Track Referrals
You can optimize and grow your referral program through measurement and tracking. Share custom affiliate-style links or referral codes to track individual referral super-stars and identify which customers you gained through referrals as well.
Use your CRM or a separate database to monitor referrals, then analyze the centralized data to identify trends in your industry, geographical regions, and referral sources.
Lastly, set goals based on your findings and focus your efforts on the referral-building strategies that work best. Use A-B testing and other traditional methods to narrow down your success rate and hone your strategy.
Building the Machine
The five steps to build a smooth referral-generation machine are identification, ease, incentives, nurturing, and tracking. Once you have mastered these steps, you will be able to generate and even inspire constant referrals.
The right strategy can transform your referral results from a trickle to a river of steady new leads and curious customers.
*Editor's Note: This blog has been updated since its original post date.
