A couple of weeks ago I discussed why a customer referral guide is a great option to increase your customer and grow customer loyalty if a traditional customer loyalty program isn’t a fit for your business. I provided you with a couple of reasons why humans have an innate reason to share things.
- People want to portray themselves in a good light to others
- People want to appear as a knowledgeable source.
For a brief refresher on the previous blog post, check out the following link: blog.sailplay.net/2017/08/15/customer-referral-program-guide.
Now this week I want to focus this post about how you can structure your customer referral guide. Let’s focus on 3 key areas:
- Call-to-Action Placement
- Referral & Rewards Strategy
- Customer Dashboard
Call-to-Action placement is probably the most important aspect of your customer referral program, especially early on. If customers have a difficult time finding the “Refer-a-Friend” button, then they won’t refer anyone.
According to a study by Texas Tech University, 83% of customers are usually willing to refer someone, but only 29% do. So what does this mean? Off the bat, one-third of your happy customers are actually going to refer someone. If your call to action placement isn’t easy to find, then how many of your customers will refer someone?
You don’t want to find that out. So we recommend keeping your call-to-action placement either in the menu bar at the top of your page.
Referral & Rewards Strategy
So you got your call-to-action placement locked in a great spot, what’s next? Now it’s time to increase the 29% of customers that will actually refer someone to 40 or 50%.
We recommend offering rewards to your customers as they refer family members and friends to your business. Potentially, you can offer an initial reward for their first customer referral and then offer rewards for milestone achievements. Milestone achievements can be fifth referral, tenth and so on. We recommend offering an initial reward for the first customer referral, so customers have a positive experience with this program off the bat, ideally leading to more and more referrals.
For example, if you own or manage a restaurant, you can offer a 5% discount on a customer’s next purchase if their first referred friend makes a purchase. Now as they hit milestone referrals, such as the 10th referral, the customer can receive 15% discounts of their purchase for the next 30 days. Typically, as individual customer’s hit higher and higher milestones, the rewards become better and better.
One more piece of advice we will leave for customer referral programs is to provide rewards that keep your customers coming back to your business to use. What we mean is to not provide generic gift cards, such as Visa gift cards that can be used at other businesses, including your competitor. Provide discounts, coupons or free products/service that can only be used at your business, so you customers have an additional incentive to make another purchase at your business.
Ensure your customer referral program includes a customer dashboard, where customers can review their current status in the program. The purpose of the dashboard is to show transparency to your customers, helping them track:
- The number of friends they have referred
- Which friends have yet to complete the referral request
- What rewards they are eligible for
- How far away they are from their next reward
The dashboard will help build more trust between your customer and your business, leading to additional customer referrals. Plus in your dashboard, you can include a leaderboard to create a competition between customers. To build on the competition, we recommend creating a time-specific contest that rewards top customers for their referrals.
For example, run a contest for the top 5 customers that invite the most number of friends over the next 30 days, earn a 25% coupon on their next purchase. Through this sort of contest, your customers have an extra incentive to invite their friends and they can track their activity to other customers on the leaderboard.
To further discuss how to build out your customer referral program, give us a call at 1-800-277-2342 or fill out the form below. We can help take your customer referral program to the next level or help you draw one up from scratch.