Boost Your Reach Organically with Referral Marketing
What is referral marketing?
How can referral marketing help my business?
How do I set up referral marketing?
Imagine Mariana has moved from a sunny beach town to a foggy, bitterly cold city in the middle of winter. And she has one thing on her mind: socks.
To be more specific, Mariana is dreaming of thick, wooly, warm socks that will protect her feet from the frigid weather. But, there are a ton of different sock brands out there and she’s not sure which ones she should buy.
In the midst of Mariana’s cold feet crisis, she gets 2 emails about socks for sale. One is from Heat Hopper Socks, and the other is from her good friend Alicia.
Which email is more persuasive?
Alicia’s email is an example of referral marketing. That’s when brands reward people for telling friends, family, and contacts about their products and services.
Usually, referral marketing works like this: People are offered an incentive to share products or services via a call to action (CTA) on a product or splash page, like “Share Heat Hopper Socks and get 15% off.”
This kind of marketing can be powerful. When people recommend your business on social media, they’re putting you in front of their entire network. So, you’re being introduced to potential customers by someone they like and trust.
These shares can dramatically increase the reach of your brand – and it all happens organically. That means referral marketing can be a great partner to your paid marketing efforts, like social ads and display ads.
LISTEN UP
Nielsen research shows that 83% of people trust the recommendations of friends and family, as compared to the 63% who trust TV ads.
Navigate your site like a typical customer would, from browsing your products to making a purchase. Find areas of your site that would make your customer say, “My friends need to know about this ASAP.”
Yes, popular products are a good bet. But look at your site’s content, too, like helpful how-to videos, interesting articles, or exciting imagery. Also, people love sharing information about future sales or promotions.
Once you figure out what you want people to share, figure out what you’ll give them. There are 3 types of incentives: organic, one-way, or two-way.
An organic incentive happens when your products, services, and/or content are so useful, interesting, entertaining, or informative that people naturally want to share them.
A one-way incentive is when the person doing the referring gets a bonus or discount or some other type of reward: “Share our automated banana peeler and get 10% off.”
A two-way incentive is when both the person doing the referring and the people receiving the referral get rewarded when a conversion is made: “Share our automated banana peeler with friends. When they buy it, you’ll both get 10% off.”
REMEMBER
There are laws and regulations that apply to incentive campaigns, so you may want to consult with your legal department before engaging in them.
Guess what? Creating strong incentives isn’t the last step. You also need to think about how you’ll present these incentives to your customers.
Craft your CTA message to appeal to your customers. Remember, there are many different ways to say the same thing. “Refer a friend and get $10” is the same offer as “Refer a friend and get 10% off your $100 purchase.”
You can A/B test different versions of the same offer and see what works the best. In general, simple, straightforward messaging that offers a monetary incentive (“Get $10”) works well.
You can also change your CTAs to match where your customer is in the buying process, like pre-purchase or if they abandon their shopping cart.
For example, if a customer is browsing your product pages or has added items to their shopping cart but hasn’t bought them yet, you can have a CTA appear that says, “Refer a friend and get 15% off this purchase.”
Then, after they make a purchase, you can show them a CTA that encourages them to both come back and spread the word: “Thanks for your order. Refer a friend and you’ll both get %15 off your next orders.”
REMEMBER
Timing and placement of referral marketing CTAs can be just as important as the messaging. Some common places to put these CTAs are on the homepage, product pages, a post-purchase page or splash screen, and the account pages for customers who are logged in.
It’s also smart to consider what the person receiving the referral will see. Usually the referral happens via email or social media post. What will this look like?
Think about the design of a referral email, and whether you want to include graphics or photos. Also, what will show up when a referral is posted to social media? Do you want photos of your products, your logo, or other imagery to appear?
Messaging is important here, too. Will you allow customers to write their own message when recommending your products? Sometimes customers find it helpful when you offer a pre-written message that they can edit.
TOOLS
We just went through a decent amount of steps for setting up a referral marketing program. But here’s the good news: You can use online services like Referral Candy, Friend Buy, and Referral Saasquatch to help you get started.
While you’re setting up your referral marketing program, don’t forget that you need to promote it, too.
Create online ads that tell current and potential customers what they’ll get when they refer your brand, products, and services to friends or family. Use remarketing to show these ads to previous site visitors as they browse other sites.
These ads should lead to standalone landing pages on your site that are dedicated to your referral program, making it easy for people to participate.
Finally, use A/B testing to see which combinations of incentives, CTAs, messaging, timing, placement, and accompanying content work best.
By “work best,” we mean which combinations get the most people referring friends, the most referral recipients coming to your site, and the most referral recipients converting (purchasing, signing up, etc.).
Keep in mind that different combinations work better in different timing and placement scenarios. Testing helps you refine and adjust, so you can zero in on what works best in certain situations.
DO THIS NOW
The type of incentives you choose will depend on what type of products or services you offer. Let’s get you started by creating a list of incentives that might be right for your business.
If you’re participating in the course, go to the next section to access your self assessment.
KEY TAKEAWAYS
Referral marketing is when you incentivize your website visitors to tell their friends, family, and contracts about your products/services.
Referral marketing can help you reach new customers through people they like and trust, increasing your business' reach organically.
Figure out which products/services/content on your site people are most likely to share, what incentives you can offer, and how you'll present and promote these incentives.