As humans, we like to compartmentalize things to help our brains cope with complex and often intertwined ideas. In our line of work, when talking to businesses about starting a referral program, we often hear things like “So, this is a turn key program?” or “How many leads can we expect from referrals if we start doing this program?”
These aren’t bad questions and people are correct to ask them, but the underlying issue is that they view it as an “add-on” or as a separate thing from the rest of their business or marketing. In fact, a referral program is less of an add-on and more of an augmentation to your existing customer success tactics and marketing executions.
If you’re going to be successful with a referral program, we have to discuss how it can be fully integrated into your processes and existing marketing work.
So, what does it mean to “integrate” your referral program?
While my goal isn’t to make this sound complex or daunting, the more ways you can be “referral first,” the more successful you’ll be with both a referral program and your marketing in general.
Let’s say for example that you are currently doing Facebook ads about your product or services. Often times, these ads focus on features or benefits of said services or products. Sometimes, these ads may even tell a story like “Here’s the issue we’re sure you’re seeing and here’s how our product or service solves those problems.” Both of these are common tactics for advertising. However, these are also appealing (generally) to a “cold” audience that doesn’t know who you are or whether they should trust you/purchase from you.
By swiveling your focus to having more and better conversations with your existing customer base to generate warm leads to their friends and family not only changes your entire marketing strategy, but it also helps connect marketing with sales by providing better quality leads and often, more quantity of leads.
So, when adding a referral program to your marketing, don’t look at it as a thing that lives in the periphery and operates independently, but rather, an augmentation that will both influence and be influenced by your existing marketing.
Benefits for both the referral program and your marketing
When you work towards this full integration of your referral program into the messaging and marketing of your company, you’ll see more referrals, better leads, and a general shift in the type of customers that you work with on a daily basis.
Most people who start their own businesses (or run their own)have said, at one point, “I’m so excited to get to choose who I work with and who my customers are.” We all want to have more control over our ability to find customers who believe in our services and/or products. One way to do this is to get more referrals because that’s your customers’ way of sending other people that are similar to themselves who they think would be a good fit for your business.
Again, rather than just getting cold people who may not know or trust you, you instead get pre-qualified and pre-educated customers who already have a positive view of your business. This will help you to see success in your referral program.
Alternatively, this will improve the quality of your marketing efforts. Marketing’s goal is always to provide more leads that are higher quality. So, through the power of referrals (and referral tracking software like WarmUp), marketing can more effectively measure the results of its work.
Instead of focusing on vanity metrics like clicks, likes, and form fills (which are often lower quality when coming from typical ads), the marketing person or department can instead get more leads of higher quality through referrals.
This collaboration means more success for both your referral program and your marketing.
What this means for your bottom line
All this is great, but what does this actually mean for your bottom line? Since you’re getting more leads of higher quality, the sales department will have more leads to process with a higher average close ratio per lead. Marketing can more accurately delineate where a lead came from and work backwards to assign a revenue number so you can actually see the real ROI from your program.
Since the most common type of incentive for referrals is a monetary reward based off of a closed sale, there’s no risk of paying out incentives for bad leads, which allows you to set your cost per conversion up front.
Another, often overlooked benefit, is that it can help your marketing be more focused and more efficient versus multiple campaigns around multiple objectives/goals. By focusing your entire effort on wowing existing customers and then using that trust to get additional leads from them, you can laser focus your efforts for maximum results.
If you’re interested in kicking off your own referral marketing program, give us a shout! We’re happy to help brainstorm how a referral program could help your business. We also happen to have some software that could help you track and run the program plus tons of expertise on what works or doesn’t work for different types of businesses regarding referral programs. We look forward to discussing the opportunities with you soon!