So you’ve got your referral program up and running. Sweet!
How do you get the most out of it, though? (Click to jump to the relevant section, or simply scroll down if you prefer)
- Write succinct referral emails with strong Calls-To-Action.
- Structure your incentives according to your customer’s motivations, and communicate them effectively.
- Maximize the potential number of referrals by inviting existing and past customers to your referral program
- Display your referral calls-to-action prominently – out of sight, out of mind!
- Don’t forget your business fundamentals – make sure your product is worth referring!
1. Write succinct referral emails with strong Calls-To-Action.
When a customer buys a product from your online store, she receives an email from you (powered by us), with a coupon link for her to share with her friends. You can customize this email however you like.
Here are a list of things you can do to get the most out of this email:
- Focus on the subject line: a higher % open rate gets you more referrals.
- Keep the email really simple – “Give $20, Get $20″ works!
- Make your call-to-action impossible to ignore
- Emphasize the motivation for purchase
- Highlight the benefit to Friend AND Advocate
- Include any additional conditions for the referral
After you’ve written it, read it from the perspective of your customer. Better yet, ask a friend to read it. Ask them what they found confusing or tedious – they know better, because they don’t know your product as well as you do.You know your product too well to know what throws people off.
The clearer the email and the call-to-action (“Share this link now to earn ______!”), the better your conversion rates will be.
2. Structure your incentives according to your customer’s motivations, and communicate them effectively.
Rewards are better than no rewards. But who should you reward more, the customer or the friend she makes the referral to? How much should you reward them, exactly? (Ideally, you’ll want to reward them as much as possible, but you’ve got a business to run, too. Otherwise it’s free goodies for everyone!)
Most specifically, how should you distribute the reward that you’re willing to give?
Here’s a quick summary of our observations of what has worked for successful retailers when it comes to setting up referral incentives:
- If your advocates are likely to make repeat purchases, give discounts to encourage them.
- If your product costs more than $100, a flat discount is usually more enticing ($500 off a $2,000 laptop)
- If your product costs less than $100, a percentage discount is usually better ($10 off a $50 t-shirt is better phrased as 20% off)
- If your advocates are unlikely to make repeat purchases, give cash.
- If you’re doing preorders, consider giving cash discounts on the advocates’ existing preorder.
- Remember to focus on your customers’ interests and motivations.
3. Maximize the potential number of referrals by inviting existing and past customers to your referral program
Sounds like common sense, but reaching out to as many people as you can is probably the single most important factor that’ll determine the success of your referral program.
The more people that know about your referral program, the more likely you are to get new referral customers and referral sales:
- Past or existing customers are a great source for referrals since they’ve purchased from you before. If they enjoyed your products, they are more likely to recommend it to their friends.
- Your followers on social media are definitely interested in your brand, so they might already be telling their friends about you. Still, it’s good to give them another reason to share.
4. Display your referral calls-to-action prominently – out of sight, out of mind!
We often overlook this because it seems so obvious, but a customer can’t make a referral if he’s unaware that he has option to do so.
Not everybody checks their email. It’s worth reminding your customers (through social media, or on your site itself) that they do have that option, and that it benefits them. Here’s a nice example from DapperTime:
The keyword is “benefit”. Why should he do it? You have to tell him! (Remember, you get to choose how the benefits are structured.) Are you rewarding him directly, or his friends, or both? Make it loud, make it clear.
Need more inspiration? Here are 10 Examples of Prominent Referral Program Calls-to-Action… in action.
5: Don’t forget your business fundamentals – make sure your product is worth referring!
Referral programs don’t magically create customers out of thin air. They simply accelerate the natural, organic process of sharing information (“Wow, this is great, I gotta tell everyone!”) by rewarding people for doing it.
Your customer must still like your product enough to want to refer it to his friends. Few people will refer a lousy product to their friends even if rewarded, because doing so would diminish their social currency.
So make sure you’ve got a great product to begin with, and that you focus on making your customer’s retail experience a great one (ie: avoid these mistakes!)– and then you can reap some truly delectable returns from your referral program.