Whether you are running a B2B or a B2C business, nothing can beat good word of mouth advertising. There is no better marketing than a happy customer that will recommend you to friends, colleagues, and family.
When working on the development of a new strategy to boost your conversion rate, it is useful to have this target group in mind: your most loyal clients. Referral marketing is an excellent idea for an online company, especially if you are running a SaaS or E-commerce business.
In our previous article, we have explored how to make the most of referral marketing. Now I would like to examine some of the most effective strategies and how the implementations of the referral program look like in practice.
So, let’s dive in.
What makes a good referral strategy?
There is no playbook for a good strategy since each business is different and your strategy will depend on your audience and the current trends. However, there are some golden rules you should be aware of before diving into creating your referral program.
Here is what a good referral marketing strategy should be aligned with.
It builds trust towards your company
Research shows that people who use your products or services would also love to know your company better. In order to get your customers to refer to your brand, first, they need to become happy customers.
To get your audience more included and active about your brand, let them in and share your experience with them. Gather your community around the values you promote and help them understand what they contribute to by being a part of your story.
It offers quality worth recommending
This goes without saying. Nobody wants to recommend a product they are not happy with. To be able to implement the referral program, you need to make sure your customers are satisfied with your brand.
It is customer-oriented
When your potential customer receives a recommendation to try your services, they need to see the value you offer. To always be on top of the game and certain that your strategy will work, you must distinguish your company from the competitors.
How to make sure your customers will refer to your brand? Ask them! Conduct research and gather their feedback. Learn what they love about your company and use that information as your main resource when designing your next strategy.
It communicates clearly
Last, but not least, a good referral market strategy needs to be presented clearly. Every day, new attempts of referral programs designed to engage the consumers are failing for many reasons.
One of those reasons is that they are too confusing for the customer. Either it is not super clear what you offer if they refer you, or the process of claiming your bonus is overwhelming.
Present your plan in a simple way, with a good explanation video and an FAQ section of your referral page. Your video doesn’t have to be high-budget, even a small investment will do. Use a free video maker to clarify your offer and invite your customers to come abroad.
5 Most effective referral strategies for online businesses in 2021
Referral strategies can happen on your website, in your newsletter, on social media. Let’s see which channels and strategies are proven to be effective and trending in 2021.
#1 Instagram giveaway strategy: Create a competition
If there is one thing your customers would love even more than getting stuff for free is to have fun. People love playing games and enrolling in competitions. Brands on Instagram are well-aware of the results these campaigns can bring which is why they often use this approach.
Whether you are launching new online software, or have new attractive products on sale, creating a referral strategy in a form of a giveaway is quite promising.
Motivate your customers to bring their friends to the game and share your content to enter the race for the premium account on your platform or a generous voucher.
#2 Clubhouse strategy: Be exclusive
When we observe the rapid growth of users and public interest, we could argue that Clubhouse is one of the most successful social media apps in 2021. How did Clubhouse achieve to be the main trend today?
This social media app was using a referral strategy by allowing new members to join only if they had an invitation. This referral phenomenon began with the celebrities being included on the network.
Once the word got out that the famous people were there – everybody wanted in. The exclusivity of Clubhouse is the key factor of its rapid success on a global scale. It achieved the effect that the users were referring to the app because their friends wanted to be included.
#3 TikTok challenge strategy: Awaken their imagination
TikTok has become a trend itself, but it is more than just that. This is a trend-setting app that has inspired some of the most serious brands to become more playful and relaxed. And it is no longer just about Gen Z.
Introducing an awesome challenge by your brand is guaranteed to bring your more user-generated content. Your customers who share their ideas about using your brand will help you build a larger community and get potential customers interested.
The user content will not only contribute to your referral plans. It will also make a fuss about your company and raise the public interest, which can also be a beneficial way to boost your B2B content creation.
#4 FOMO-based strategy: Limit the awards
In today’s world, people don’t like being left out or missing out on good deals. This is why one of the top strategies you can use in referral marketing is to limit the number of customers who can claim the benefits you offer.
If you announce the referral program in a tempting, attractive manner, such as Only the first 100 people will get product X, you are instantly getting them more interested in your offer.
And, since you are only giving away a small number of prizes, you can make a really sweet deal that will get everyone who didn’t claim it waiting around for the next episode.
If you are unsure how to start or what to offer within the strategy, don’t settle for the least selling products like a lot of companies out there do. Instead, use google search statistics to get a perspective on what your customers need the most.
#5 “Everybody wins” strategy: Go an extra mile
Big brands such as Oriflame cosmetics and Airbnb have used this strategy successfully, and in 2021 more brands will follow their path. This strategy offers a win-win situation for your customer and their friends. How does it look like?
Let’s say you run an e-commerce business. Your referral program could be that you offer a $10 discount on the next purchase from the buyer who refers your brand. On top of that, offer an additional 20% off from the new line of products for their newly onboarded friends.
This strategy is evergreen, but it is especially effective in times of crisis, such as the one our economy is going through at the time.
To sum up
There are many ways to promote online businesses and boost your sales. However, none are this cost-free as referral marketing strategies. By offering very little, from your side, you can get a lot in return.
Content-based SEO campaigns and referral programs are going hand in hand. The new strategy you put in place will need to be heard, to be easy to find, and finally to go viral on social media.
Referral marketing is also one of the best ways to improve lead generation and conversion rate. When planned right, offering a great value, and following the current trends. Don’t forget to do your research and make sure you reach out to your customers giving them the offer they can’t refuse.