A Step-by-Step Guide to Creating a Referral Program that Works by

To get people to your site, you need to give them an incentive. Then, you need to give them an incentive to bring other people to your site. It is a never-ending process, but many people don’t fully understand the process of creating a referral program that actually works. Without a process in place, your referral program is never going to be at the level you want it to be. So, we have put together a step-by-step guide that will help you to create a referral program that will work for you. Let’s get started.

What is a referral?

First, let’s look at what a referral actually is. In a nutshell, a referral is when someone recommends your site to someone else, through a link that they have received from you. There are three basic types of referrals: implicit; organic; and incentivized.

  • Implicit Referrals – When a user must share your link with others before they can actually get into the site and fully appreciate the experience.
  • Organic Referrals – This is content that people just automatically want to share, such as cute kitten memes.
  • Incentivized Referrals – This is when you give the user even more incentive to share your link or product outside of improving the functionality of their experience. This is very targeted.

 

Building a referral strategy

Now that you understand what a referral is, it is time to start building your referral strategy. The first thing you need to know is that you need to find the right people to share your product. The next thing is that you can’t ask them too soon, because you have to wait until you know they are into your product and are ready to share.

If you have an email list, but no one has responded to you, there really isn’t much sense in asking for referrals. Still, you can get those early birds who will give you referrals, but you have to do it in a hand’s on and personal way. Your best advocate audience is made up of about 200 or more existing customers who have transacted with you recently (within 30 days).

Now, you can start to work on your referral strategy, which involves giving people the right incentives to share your product.

 

Choosing the incentives

If you aren’t giving out the right incentives, people aren’t going to bother sharing your product. So, you need to figure out what it is that they really want. It is unlikely that your product alone is going to be so unique that it is enough incentive on its own. Here are a couple of tips that will help you to choose the right incentives:

  • Double-Sided Incentives – Try to offer incentives that give both parties a reward of equal value. This makes it seem like your offer is not just spam. If the advocate can earn more than their friend, it can seem a lot like spam, and vice versa.
  • One Sided Incentives – It may be that you can only afford to give out one incentive. If this is the case, choose the friend rather than the advocate. This only works for referral programs, and not with affiliate programs.

 

Send out the email

Now you have to ask for the referrals. To do this, you need to craft an email that is going to make people want to refer others. You also need to know how to ask, and this can be a problem for many people. The trick is to send an email that is neutral for your advocate and for their friends. The advocate can forward the email to their friends, so there isn’t much work or friction on their end. The benefits of this type of email include:

  • Explaining the benefits of the product
  • Offer something to both parties
  • Easily sharable
  • Easily convertible

Don’t forget to include your email signature. This is extremely important, because it will allow support teams to reach your users when they have solved a problem. This is going to double the chances of the user making a referral.

Build a landing experience that is going to make people want to visit, and to share your product with others. Make sure that they have a good incentive to share, and to visit again themselves. Look for referral program ideas that have worked for other companies, and use the same tactics for your own success.

 

Track the results

Once you send out the emails, you need a way of tracking them to see if your referral program is actually working for you. You will need to implement analytics and tracking systems, using referral program software. These two things are going to help you to understand how you are getting the referrals, so you know what is working and what isn’t. If you use Google Analytics, you will be able to see where people come from before reaching your site. In addition, make sure that you are using the right referral software.

 

Choose and send the right rewards

Finally, you have to figure out which rewards to choose. You need to understand what you users want, and what will lead them to make that referral. Create your rewards program around the motivations of your users. Reward types include:

  • Single and double-sided rewards – Single rewards are common, but not nearly as effective as when double-sided rewards are offered.
  • Monetary and non-monetary rewards – Offer prizes based on the behavior of your visitors. Offers can include giving access to premium features, company swag, etc.

Make sure that you offer a good variety of rewards. Not all users want the same thing, so you are going to need to customize your offers for various users.

Now, you have all of your ducks in a row, you have referrals, and it is time to start giving out those rewards. If you are offering cash rewards, PayPal is the best way to send it. Or, you can send a coupon code. If the reward is a physical product, let them know that it is on its way in the mail. You will have happy users, and because they are receiving rewards, they will be more likely to refer your product to even more people.

 

Over to you

Do you use referral programs in your business? What was your biggest lesson learned from using it? Share your thoughts in the comments below.

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