Soft, buttery referrals. Sweet, sugary tactics. Fresh out of the oven, hot and ready to boost your business. Welcome to ReferralHero, where we deliver the perfect recipe for marketing success.
Imagine you need a cake for a birthday party. You have all the ingredients at home, more than enough time to make it, and to top it off you’re a trained baker. We all know what the next step is. Go out and buy an overpriced, sub-par cake from the store.
Obviously, I’m kidding, but this is how a lot of marketers approach generating leads. They go straight to expensive, large-scale campaigns without considering that the most effective tool is readily available to them, their existing customer base.
Referral sales capitalise on happy customers, turning positive interactions into lead magnets of their own. Only 30% of companies have a referral program in place, meaning they’re leaving money on the table and missing out on an easy, delicious homemade cake.
What Are Referral Sales?
Referral sales take satisfied customers and send them out to find new leads. By relying on word-of-mouth marketing, you create a viral loop that boosts your sales exponentially.
Each happy client will go out and tell their network about your company. Because they heard about it from a friend, these potential new customers come in already trusting you, and looking to make a purchase.
You spend far less time reeling them in, explaining the benefits, and building credibility, but you usually end up with a bigger reward. Referred customers have a higher lifetime value, and they feel connected to your brand because all their friends are here.
You can encourage this kind of sharing with a referral campaign. By rewarding folks for spreading the word and bringing in referral sales, you can kick this feedback loop into hyperdrive. More referrals mean more referral sales!
Benefits of Referral Leads to Businesses
You do give up some level of control over your brand when placing it in the hands of customers. However, the benefits of referral leads far outweigh any perceived risks.
High Conversion Rate
Referred leads arrive ready to play. They already have a basic understanding of your business from their friend, and they are actively seeking you out through the referral link. This means you can build upon a firm foundation, and have a much higher likelihood of making a sale.
Lower Cost of Acquisition
Rather than spending loads of money on complex advertisements, referral leads simply require you to have clients who are excited to share. They do all the work of awareness, market research, and more. Referral marketing isn’t completely free, but offering some incentives and organising a reward system is far less costly than any other strategy.
Increased Trust and Credibility
A huge upside of referred leads is that they inherently have social proof. A friend or colleague they trust has recommended you, presumably by singing your praises. This does the work of earning their trust for you. You also don’t have to put as much effort into showing off the success of your brand because they will already believe in it.
Wide Reach
Your reach can grow exponentially with referral sales as every new customer brings an entirely new network. What’s more, these networks usually have very little overlap with each other or your core market.
A wider reach means you can connect with demographics that you wouldn’t normally, and you may find whole customer segments that you were overlooking. You’ll also boost your brand recognition, giving you even more of a leg up on conversions.
Better Targeting
Your existing customers are a wealth of information regarding referrals. They know all about your company, they know why they trust you, and they know their networks. What’s more, their friends likely share interests, values, and needs.
All this means that a referrer is a direct line to your target demographic. They like your company enough to share it, and their friends are just like them. This is why referral sales operate as a hack for exponential growth.
Programmatic Referral Sales
Referral campaigns deal with a lot of moving parts, the majority of which you don’t have any control over. You never know who will bring in leads, what exactly is being said to attract them, or when they’ll turn into conversions.
With so much uncertainty, your referral sales must be as programmatic as possible. This means everything should be organised, clear, and automated.
If you have to create the backend of your referral program on your own, you’re likely to spend tons of time and resources on a sub-par operation. That’s why referral software like ReferralHero is a great option. With its simple user interface, robust reporting, and easily generated landing pages you can get a fully programmatic referral strategy going in no time.
ReferralHero can be an invaluable tool for the following functions of a thriving referral program.
Facilitating Rewards
When you’re offering incentives for each referral, you need to ensure people get the thanks they deserve. Even one person’s reward getting missed could lead to mistrust and take out your campaign at the knees.
The perfect referral sales system will include a unique code for every referrer, and instantly credit them when the code is used. It sounds straightforward, but when you have hundreds of referrals coming in, or a tried reward system based on lead quality, it can get complicated fast.
Ideally, the entire reward process would be automated to eliminate the possibility of human error and to keep everything moving along.
Scaling Your Referral Program
Automation allows for faster processing and can help you avoid the bottleneck effect that often occurs when trying to handle a high volume of referrals manually. This means you can confidently scale your program without worrying about overwhelming your team and creating delays.
It also makes it easier to track the success of your program and see where the areas for growth are. For example, if one customer segment is consistently bringing in more referrals, you can tailor your rewards to keep the momentum going.
Providing Consistency
By automating your referral sales process, you can ensure that all of your referrers receive the same experience. This includes consistent messaging, rewards, and tracking methods. This not only helps with trust and transparency but also creates a level playing field for all referrers.
Additionally, consistency in the referral process can help with customer experience. When everything is streamlined and efficient, new customers get a great first impression of your brand.
KPI Tracking
To measure the success of your referral sales program, you need to track key performance indicators (KPIs). This can include metrics such
- Number of Referrals Generated
- Conversion Rate
- Cost Per Acquisition
- Customer Lifetime Value
- Participation Rate
- K Factor
- Time to First Referral
- Retention Rate of Referred Customers
By setting up a programmatic system, you can automatically track these KPIs without having to manually gather and input data. This allows you to make data-driven decisions and adjust your program on the go.
The 4 Best Ways to Generate Referral Leads
Let’s zoom in on what you can do to bring in referral sales right away.
Deliver Exceptional Service
Remember, happy customers love to share! When you go above and beyond people’s needs, they will have even more to tell their friends about, making referrals feel organic and make a huge impact.
The more you can exceed expectations and build connections with your users, the easier it will be to ask for referrals. In fact, truly excited customers might share their experience without being asked at all!
Offer Killer Incentives
People want to feel appreciated. Everyone loves getting a good deal or being rewarded for their loyalty. Also, if your friend is trying to sell you on a new brand and offers a discount or prize, you’ll be way more excited to check it out.
When designing your referral program, make sure you include incentives like discounts, free products, or even cash rewards. This motivates your current customers, and if the reward is two-pronged it will motivate new leads too. It’s been proven that incentivizing both the referrer and the referee can dramatically boost referral rates and bring in more sales.
Hop On The Socials
Your users are already connecting with their networks and friends on social media. Make it easy for them to get referrals on these platforms they’re already super invested in. By creating unique referral links, or offering fun content to post, you can easily make a splash.
Social media also opens the door for fun initiatives like contests and user-generated content. These pushes make referrals far more enticing because it’s clear that your brand is cool and fun.
Just Ask
Sometimes, all it takes to generate referral leads is simply asking for them. Be confident in your product or service, and don’t be shy about asking happy customers to spread the word. You can bring it up during interactions, through email campaigns, or by advertising your stellar referral program.
The Bottom Line
Don’t break the bank to build your customer base. Open up the pantry and use your sweetest resource, satisfied customers, to bake an endless supply of referral sales.
By taking a programmatic approach to your referral campaign, you can make a huge impact without having to micromanage the backend. This will set in motion a viral loop and have the referral sales practically making themselves. With careful planning, and tools like ReferralHero, your company can have their referral cake and eat it too.
.png)
