Humour me for a moment and picture the scene.
You think you might need a new filling.
(Apologies for the teeth-related analogy, it’s not what you came here for, I know, but it’s going to help us get into the right mindset for the lesson that follows, bear with.)
So you think you might need a filling, but it’s been a good few years since you last went to the dentist, and you’re not certain where to go now.
One thing’s for sure though, you won’t be going to your old provider, not after the last time, so you need to find somewhere new.
You’ve got plenty of options of course, with several practices within a five-mile radius, and you’re happy to drive.
Most of them have good enough reviews on Google, so how do you choose?
If you’re sensible, you ask your friends, and it’s not long before Brenda’s given you a glowing recommendation for Mr Davenport on Bright Street – she’s never had a bad experience, rarely felt any pain, and she’s got a beautiful set of pearly whites to boot.
You book your appointment, your filling’s sorted, you thank Brenda for the advice and you get on with your life, pain-free.
What's the point of the story?
The lesson’s very simple, and when you think about your own life and the products and services you’ve been thinking about exchanging your hard-earned cash for, you’ll know it’s true.
People trust their friends more than the words on a website…
More than any marketing emails they receive…
Even more than the hundreds of reviews they can access on Google, Feefo, Amazon or whatever platform.
Which is why referrals are one of the greatest tools in every business’s arsenal.
In fact, the only easier way to generate sales is through repeat orders from satisfied customers like Brenda.
But instead of waiting for one of Brenda’s mates to ask her for a recommendation, why not get in there and give her a reason to shout about you first?
Because Brenda’s no marketer, she doesn’t run a business and she’s currently got no idea how much of a favour she could do for you.
Brenda’s been sat in your waiting room plenty of times, so she reckons you’re always busy, probably thinks you’ve already got enough customers, maybe even thought twice about making that recommendation in case you didn’t have the capacity to fit her friend in.
So how can you get Brenda to make more recommendations?
How do referral schemes work?
All it takes is a little incentive.
And it’ll be well worth your while. Referred leads are like gold dust – people who knock on your door because someone they know, like and trust has recommended you to buy.
They need barely any convincing to get them over the line, making them the perfect lead, and yet most businesses never even try to access them.
And all you need to do to find more of them is create an effective referral generating system. All the best ones are made up of three foundation stones:
Step 1: Give top notch service
If you’re not worthy of being referred, your referral scheme is doomed.
If there’s any risk that recommending you might dent your customer’s own reputation, they won’t do it – fact.
But if you provide outstanding service and your business genuinely stands out from your competitors, your customers should be more than happy to spread the love.
In fact, they’ll probably feel even more motivated, knowing they’ll be the person who helps their friend get the best deal from the best people.
So there’s the first foundation stone: you’ve got to be the best thing since sliced bread. Then you just need to find ways to encourage those recommendations…
Step 2: Provide incentives for sharing
Nobody wakes up in the morning thinking about how they can help you find more customers. We all live busy lives and even your biggest fans are going to need a little encouragement to make the recommendation.
Thankfully though, helping the people we know, like and trust is part and parcel with human nature, which means you’ve got great grounds to ask your best customers for a helping hand.
For some businesses, it’s enough to simply ask for the referral, without needing to incentivise the process at all. (If you’re one of a handful of solicitors who’s somehow able to make a house move run completely smoothly, your customers are likely to recommend you, gift or no gift, and all they’ll need is a little prompt.)
Though it never hurts to send a thank you gift post-recommendation too.
But for most of us, a fun, inventive referral-generating scheme will work wonders and bring in plenty of new custom. The sorts of things I’ve witnessed success with, in my own business and friends’, include…
- A 50% off voucher for every referral who becomes a customer
- A free service for every three referrals
- An upgrade to the premium service for a year when your friend joins
- A £50 gift voucher for every converting referral
It goes without saying that the sort of products and services you offer, and their value, impact the offer you create.
3. Don’t forget to capture the referrals…
There are tonnes of different ways to capture the data of your referrals so that you can begin to market to them, some less sophisticated that others.
Having a chat with a client and asking for details can be time-consuming, prone to error and easily forgotten. I’ve heard plenty of horror stories about leads jotted down on post-it notes, sitting in a box in the office for months or cleared up by the cleaner.
So to avoid making silly mistakes and missing out on the gold dust, you need to get smart with your referral system. Enter automation…
Through Keap, it’s super easy to automate making the offer to your existing clients, collecting the data and distributing an invitation to the lead. All it takes is some strategic thinking (which we can help you with if you need it).
The most important task is to find a way to link the prospect’s information when it arrives with the person who recommended they check you out.
Done right, things like affiliate links, unique offer codes, data capture widgets on websites, or a simple “where did you hear about us?” form will work wonders, so long as you collate the information automatically and have a follow-up process in place.
How can we be sure referral schemes really work?
Oh there’s plenty of evidence.
Take Dropbox for starters. They launched in 2008, offered their customers more storage in exchange for referrals, and within 12 months they’d increased their customer base by 4,000% through word of mouth alone – not a single penny spent on any other advertising.
It makes sense then that studies have found that word-of-mouth drives at least five times more sales than paid impressions – which you can read more about here.
But there’s also evidence to show that referred leads convert 30% better and have a 16% higher lifetime value than leads acquired elsewhere. They also spend twice as much, and make twice as many referrals themselves.
So kind of a big deal, right?
So what should your referral campaign look like?
Here’s some practical advice to get you started, but if you want help actually putting these steps live, just let us know.
Thankfully, creating a referral scheme that works again and again to generate hot leads is as simple as these five steps…
Step 1: Set a SMART goal.
SMART stands for specific, measurable, achievable, realistic and timed, and your goal should set out the results you want to get from your campaign. Be detailed, it helps.
Your SMART goal might look a little like this…
Specific: I need to generate 100 new leads.
Measurable: the referrals will come through a specific link to identify them as unique from other leads.
Achievable: I have 500 existing clients, so one referral from five clients is a reasonable expectation.
Realistic: version one of this campaign worked last year, so this improved version should be a success too.
Timed: the campaign will run for 4 weeks, by which point I’ll have hit my target.
Step 2: Choose the right incentive
Nobody knows your customers better than you, so you should be best placed to decide what they’d want to receive out of your scheme. Heck, go and ask them if you’re not sure!
The more valuable or desirable your reward’s perceived to be, the more likely you are to provoke a referral – so don’t assume “free pen” will do it… And remember, if you’re running a dual premium (i.e. you’re rewarding both the referrer and the referral), make sure both people will feel just as compelled to act.
Step 3: Keep it simple
Complexity killed the cat, or something like that, so you want to make sure your offer is as easy to navigate and transparent as possible.
If your customer can’t quickly understand the offer and what you need them to do, it’s too tricky. Change it.
Step 4: Don’t forget your landing pages
They don’t need to be fancy, but they do need to be functional, professional and appear trustworthy too.
State the offer clearly and give your users multiple opportunities to “click here”, where they can pass on the details of their referral.
Make sure your landing pages are sharable, and set up an automated “thank you” email that’s triggered when a customer makes their referral.
Step 5: Promote promote promote
Don’t be afraid to press go. Do it. What’s the worst that can happen?
80% perfect and out the door will always outdo that 100% perfect campaign you never put out, so try not to worry too much about potential teething problems.
Best thing you can do is start.
When it comes to the physical promotion side of things, there’s loads you can do; from sending simple emails to your existing list, asking long-term clients to email their own lists, popping some banner adverts on your website, creating social posts and even finding relevant influencers who’ll promote your programme too.
The simpler your strategy, the more success you’re likely to have. But it can be super hard to know where to start, particularly if you’ve never even tried before.
Want some help there?
If you'd like to have a chat about creating a bulletproof referral campaign and discover how you can automate the hell out of it, get in touch by sending an email to firstname.lastname@example.org, give us a call on 01242375000 or hit the button below to schedule a call.