Online Referral Program Best Practices

by admin on August 31, 2010

Every time a study is conducted about marketing programs, researchers come up with the same results. Referral marketing is the best form of marketing, yet many businesses overlook this simple tool.

Further research indicates that most businesses know this fact, but fail to act upon the information. Only approximately 37% of businesses actively use referral marketing as part of their strategy, even though they know it provides the best results.

So the question is why. Some professionals believe implementing a referral program is too complicated; others believe it to be too time consuming. However, both opinions are wrong. All companies have a customer database. An e-mail list is all you need to begin your promotion and a newsletter is simple to create.

There are a few things that businesses should keep in mind though, before starting any referral promotion.

1. Let your customers know why you stand apart from other companies. When you promote your referral program remind your customers why you stand apart. Let them know how you are connected to your/their community.
2. Make the reward for the referral worth the effort. Honestly look at what you are offering and decide how you would react to the offer. If you are not impressed your customers will not be either.
3. Keep it simple. If your customers have to sit and figure out how they are going to be rewarded by referring your company they are going to pass on the offer. Digital marketers must remember that attention spans are short, the point must be made, and made quick, or you have lost their attention.

The overall picture is quite plain. Utilize the information you have about your current customers to your advantage. Take that information and let them know why you are special. Reward them for a referral, and thank them once you have received one. And, finally, keep it simple. Referral marketing works best when it is basic and feels natural. Customers do not want to “feel” like they are promoting your company. They want to refer products or services as part of a conversation where their input is appreciated.

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Ideally, a business would like to be present on as many channels as possible in order to engage their audience at every available touch point.  However, the reality is that time is finite, and most businesses don’t have the resources to dedicate toward creating meaningful conversations on every channel.  Therefore, a good rule of thumb when choosing a channel would be to think hard about your customer, and try to predict where most of them are spending their time engaging with friends, family, and colleagues online.  First evaluate each potential social media channel, create an account, and get a feel for the demographic of the people who use it.  Because most businesses spend a lot of money on search, try searching a public engine for social media networks and tools which appeal to your demographic.

In my experience, 1-3 channels can be managed by a small to mid-size business in a time effective manner.  Typically, most businesses invest in Facebook, Twitter, and a company blog.  Again, make to to choose channels that are used by the people that you want to talk to.  For the most part, most people use these three channels.

Once you’ve found a few social media networks that “feel” right, make sure that if you move forward and commit to building a presence that you do so with force.  Simply creating an account and expecting your customers and prospects will not lead to success.  Remember, successful social media marketing is about quality, not quantity.

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