11 Best Practices for Boosting Customer Referrals
Wharton School of Business states that a referred customer is 18 % more likely to stay with a company over time than the average, off-street customer. Customer referrals, whether in the form of contact information, a testimonial, or tips shared by customers to their friends, are one of the most sustainable ways to grow your business. Yet few businesses actively aim for the optimal referral setup, which is a huge waste.
The main reason why a customer referral can become so powerful is the same why it’s so difficult to achieve - because it comes from a super credible person: the friend or relative with no direct motivators to promote you. Real friends do not spam one another. Your job is to make your customers feel as if they would be bad friends for NOT sharing your offering. Here are some tips that will turn your customers into your strongest marketing asset:
1Set up clearly defined service standards
A referral is like a customer repeating your offering to his friend. For them to repeat, your offering must be memorable. That’s where the famous one-liners come from: “2 for the price of 1!” “Not good? Money back”. The simpler the message, the easier it sticks in your customer’s mind and the easier for him to share it.
Hotter UK is a online shop that sells shoes and accessories of luxury quality. As a promise of their service they offer what they call the 100% Happy Guarantee through which customers have 90 days to replace or take back the product for any reason. Hotter’s message is very memorable. Also, the fact that they have 100% refund policy represents a clear stand that they push their products through the best quality control systems and acknowledge that the best they do, the more they’ll profit.
2Look through your CRM system for your most valuable customers
Your most valuable customers are most likely your most loyal ones and most likely to refer. Use the knowledge from your CRM. Find your most valuable customers and leverage your personal relationship to ask for referrals.
3Ask after the checkout process
Timing is a major issue in referral requests. The end of the checkout process is a good place for it. When placed here it will not distract your visitor from converting, and given the fact that he just did convert means that he probably has a positive attitude towards you.
4Minimize the effort with autofill and social Integrations
Most people are lazy in nature. However there’s a way to make it work for you if you add auto fill forms or integrate the referral platform to their social networks and allow them to simply pick the referrals they would like to make. Take the example of Yesware which took care of this issue by filling the form for customers so they won’t lose time doing yet.
5Disguise as a questionnaire
If you are afraid of appearing too pushy with a direct request for referrals, you can hide your request in the shape of a questionnaire as well. Take as example Asana, the delightful task management tool. After using their service for a while, a 1 question questionnaire bar appears with the question: “How likely are you to advise Asana to a friend?”.
Instead of asking for a favor, you stimulate the self-esteem of your customer by asking for their opinion. At the same time you make them realize how much they appreciate your service/product and direct their mind towards the idea of referring. Some companies follow up on positive responses with similar setups by providing a standard referral form in which the users only have to fill in their friends’ email addresses.
6Add a referral note to your products
For you it’s obvious how much you appreciate referrals, but the average customer simply doesn’t think about it. There is nothing wrong with creating awareness. You could include a note together in the box of your product asking whether they know somebody that might be interested and giving them instructions on how your customer can establish a connection. The moment of receiving a package delivery is one of positive excitement, it’s a good idea to catch them while they’re in a good mood.
7Reward the referrer
You can offer your referrers monetary-related gifts, such as discounts on future products/services, gift cards, or even cash. Make sure there’s a short time-window between the referral and the handout of the reward (if possible immediate). Take the example of Omaha Steaks, which runs this referral activity through their landing page.
Another good example of monetary bonuses for referring activities is the eCommerce Website Adoreme.com (a chic lingerie online store) which handouts $15 for inviting your friends to buy stuff on this store:
8Reward the referred
Like we said, friends don’t spam each other. But real friends don’t keep great opportunities for themselves either. Therefore splitting up the referral compensation between the referrer and the referred is an extremely powerful practice. On the example above from Adoreme.com cash handouts as discounts are also extended to the referred friend with a discount on the products.
9Set up an official referral program
A referral program offers your customers a systematic reward, such as a percentage of sales, a permanent discount, or even a special prize every time they refer a friend or a referee undertakes a set of predetermined actions.
One of the most successful referral program’s in the world is Dropbox. The key to the great success of this program was the understanding that managers had about giving what really matters, what customers really need. Dropbox gives out space for all of those who share it with their friends, and the space they hand out is not a symbolic gift, it’s visible and makes people’s time for referring worthwhile.
10Say thank you
When people refer to you they are doing you a favor. When they then don’t hear back from you they feel unappreciated. Get back to your referrers whenever possible and thank them for their efforts, whether they successfully generated customers for you or not. Positive feedback stimulates more referrals.
If you have many customers, don’t avoid automating your processes. There are many systems and softwares such as Referral Candy, NextBee, Ambassador, Invite Box and many others which can help you with this task. Losing track of your referral process might not only miss the referral, your current customer might feel unappreciated.
11Hand out referrals to other companies
Referring customers to your partners or business acquaintances is a great way to build up referral karma and receive back in the future. Make it a task to go through the customers you have the best relationship with and think about what services could benefit them. Then do make sure that these companies know the referrals came from you.
Boosting your customer referrals is a process that might take its own time, especially because it requires constant customization and optimization. However implementing some simple tips as the ones we’ve presented will lead you to quickly increase your customers' willingness to refer you.