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3 Tips to Creating a Referral Program

In today’s day and age, potential customers of any product of service look at online reviews and ask their friends and family for a recommendation before completing a purchase. And let make a prediction….you’re guilty of this too. Okay, guilty is a stretch, but you and I both know that I’m right.


So, what do we do now? How can you apply this logic to benefit your business? PS, I also know that you want to drive profit but keep costs low. And it doesn’t take a psychic to make that prediction. You need a referral program.


What is a Referral Program?


A referral program, or customer loyalty program, is a marketing strategy that rewards loyal customers who spread the word about your business, product, or service with their communities, family, friends, colleagues, and more. This word of mouth marketing strategy applieis to both in person and online raves and reviews.


Now, let's talk about the elements of a referral program. The idea of a referral program is to create such a wicked customer experience that users or customers actually want to refer you. So, where to start?


“Create such a remarkable customer experience that you create raving fans.”


There was a book that was really popular back in the 90's called Raving Fans by Ken Blanchard. This book was then what we call now all about creating advocates. The premise of the book was to create such an unexpected user experience that the customer can't stop talking about it.


We all know that when something goes wrong, it is easy to find people complaining about it. However, when you have people raving about you, that takes a completely different level of commitment.


How to Create a Referral Program in 3 Steps


Automating a referral program can seem daunting...here are three tips to help get you started. Let’s answer that question: how do we create advocates or raving fans?


1. Know Thy Customer


Understand the customer. What makes your customer tick? Why would they need your product or service? If you need to, interview customers to find out why they actually chose your company. Sounds easy right? Well, unfortunately it doesn't end there. Most people miss #2.


2. Create a "CUSTOMER" Experience


While this may sound easy, for most companies this is the hardest part. How do you create a customer experience from the lens of the customer? Well, it starts with getting into the mindset of the customer. What is it they want? How do they want to be treated? What sort of content would be interesting to them?


Often times this has nothing at all to do with a product or service. It's more about engaging in a conversation where they feel you understand them. This is what is meant when people talk about being relevant.


3. Deliver on the Promise


It takes diligence and strong commitment to practicing these types of strategies everyday to achieve people who are willing and able to deliver on the promise of being active advocates for you.


Some ways you can deliver on the promise include:


  • Create a referral incentive program using marketing automation where people get rewarded for their referrals.

  • Use a strong social media strategy for referral recognition. People love to be recognized.

  • Use tools like YELP and other review sites to build your brand.

  • Use a social listening tool like Hootsuite or SproutSocial to ensure you are listening for conversations about your brand.

  • Respond to all NEGATIVE comments immediately and follow up.


Letting Your Customers Speak For You Through A Referral Program

Remember what we said before, potential customers look to others before making a purchase. In fact, 92% of consumers trust referrals or recommendations from people they personally know, according to FinancesOnline. And we know this certainly applies to you too, so why wouldn't it apply to your business?


Let your customers do the talking. Word of mouth travels quick! We outlined three simple steps to help you create a referral program, don’t wait around any longer!


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