The road out of lockdown and into recovery will be a challenging time for many businesses in the UK. Many companies will be looking for ways to move the needle and make sure the crucial upcoming months and years go their way.
Referral schemes are a big help in tapping into the networks of your existing customers as a new acquisition market. And with so much technology and knowledge on the market about referral schemes, there’s no reason to be daunted about getting started.
This article outlines four approaches to referral schemes, how you can get started with something basic, and how you can try a slightly more advanced option when you’re up and running. These options include email, social media, specialised platforms and your website itself.
To find out about each, skip to the relevant section below:
1. Email customer referral schemes
Simple email referral schemes
Email your customers to ask for referrals, offering rewards for successful referrals. These schemes are a boilerplate, entry-level approach that many companies depend on to generate new business.
They’re standard because they’re simple to design and execute. You can put together a simple email referral scheme that (almost) runs itself with basic email marketing software. Start by sitting down and having a look at:
- The amount of customers you have
- How many customers you expect to sign up
- How much you expect a new customer to be worth
On the back of that, establish what value reward you want to pass on your referring customers. Ideally you’d split your incentive across the referring customer and the new customer.
Then build your campaign. The process itself isn’t complicated if you’re familiar with email marketing software.
Start by generating a web form
They’re forms that take details, and trigger an action. In this case, you’re triggering an email. Most email marketing platforms let you generate them as part of a standard package.
Create a landing page
Take this web form for your referral scheme and host it on a landing page. Use the landing page to really sell the referral. Outline the reward your referring user will enjoy if their friend or family members becomes a customer.
If possible, offer the referring user the chance to send a personal message to the person they’re referring. Referral schemes are a variation of word-of-mouth, so letting your existing customers talk will personalise the message.
Send the link out
Then send a link to your existing customers promoting your referral scheme and linking them to your new landing page. You can do that with the same email marketing software.
That landing page’s web form should trigger two emails. One email goes to your existing customer to express your sincere gratitude for taking the time to refer your company. The second goes to the person your customer referred.
In the second email, introduce your company and make it clear you’re in touch because a friend referred them. Go over your selling point and invite them to sign up. Also, if you can, include that personal message of recommendation from your existing customer. Link through to a second landing page promoting your product, and driving home the reward they’ll receive.
On this second landing page, include another web form. This web form is the start of their user journey. Here you’ll gather their details, ask their permission to use those details, and take the name of the person that referred them.
Query your data
Run a query on your database for the new customers that came in through those web forms. This is usually a yes/no process. Match up the existing users with those that referred them and distribute rewards.
If you’re a dab hand with your databases, you can automate the last part. But like we say: a good scheme that exists is better than the perfect scheme that never goes live. Don’t be afraid to go manual while you learn.
Refine your audience to get more
Filter your audience down to generate quality leads for your referral scheme. Find recent happy customers, customers with glowing Trustpilot reviews, or clients with a successful recent project delivery. Asking them to refer increases the chance you’ll get quality customers, not just reward-chasers.
And why does that matter? Because…
Better referrals make for better clients
The advanced ideas revolve around generating higher quality new business. While they all pay you the same, the reality is not every client or customer is equal.
Better customers understand and value your product. That means they need less support from your team. It also means they get the most out of what your company does. This improves your reputation as a provider when other consumers or companies interact with them. Quality customers mean less stress, a better reputation, and a higher likelihood your existing business will recommend you to others.
2. Social media
A simple social word of mouth referral scheme
The most simple approach to a social media referral scheme is to take the links to your referral scheme page and push them to your audience on social media.
If you can spare the budget, considering promoting the referral scheme to your existing network. On today’s most popular social networks it’s difficult to reach your entire audience through social media, and paying to make sure your content reaches your fans has become more normal.
Go further by tapping into existing online audiences
A referral scheme is, essentially, word of mouth. But in 2021, we have another layer of complexity to word of mouth – online influencers and content creators.
Good influencers, working in a quality partnership with your brand, can elevate the profile and sentiment of your company among an enthusiastic user base.
Rather than rely on lots of your existing customers to make referrals, rely on one influential customer to reach lots of them at once.
You will still a need reward budget, but in this case the reward budget will partly go to your influencer as the referring partner. You track referrals from the influencer back onto your site using tracked URLs and custom referral codes.
How to get started
Use a media monitoring service to find customers talking about your brand or products on social media. If they’re positive, speaking to a significant audience, and represent your brand well, reach out.
Establish a quid-pro-quo arrangement. Equip them with the products and resources needed to improve their content around your brand. And be sure to promote their content through your own channels where possible, too.
The arrangement puts you in front of an audience with implicit endorsement of someone whose opinion they value. To encourage your customer’s audience to become customers, include discount codes or rewards for any conversions that come from their content.
Can’t find anyone talking about you?
Alternatively, if you don’t know who’s talking about your brand, or you need to get the conversation started, reach out to an influencer service. They work as a go-between to find the right people and get them talking about your brand.
You work with them to put great content together that reflects your brand in the right light, and they push that content out to existing, enthused audiences.
3. Incentive platforms
Specialised platforms make it easy to run more complicated incentive and referral schemes by taking the need for complicated development work out of the equation.
This is ideal if you want to run a customer referral program when you don’t have someone in your company with the skills to put together the emails, web forms, databases, and landing pages required.
Platforms make incentives simple
Use a referral platform, like our own Engage platform, to send out a referral request to your email database.
Depending on the platform you use, the process will be different. The luxury of having the process taken care of by the platform is you can focus on the referral basics, like how you’re going to communicate the scheme to your audience, and how you’re going to reward them referring new customers for you.
Get your audience right, get your messaging right, and get your rewards right. Then let the scheme go and catch your new business.
Points banking changes the game
This one is taken straight from the handbook of our Engage platform. Instead of giving rewards for a referral, give points. The points are eventually traded for rewards, but it opens a unique possibility – doing another referral and banking the points over time for big rewards.
Or combining a purchase, a referral, and long-term loyalty, to bank even more points. You can choose to have points bank for any amount of time you like – it’s your platform, after all.
By banking points for every successful referral, your customers compete against themselves for a bigger reward. That makes the customer more invested in the scheme and more likely to advocate for your business.
Introduce a leader board and a reward for the most referrals in a quarter, and your customers are competing against each other, too. The rewards will always get customers interested in referrals, but you can keep them hooked in with competition and bigger rewards.
These are all modules you could activate in an incentive platform and enjoy.
Take advantage of reporting and data
Another advantage offered by your platform is capturing data. Right off the bat that gives you the power to do two things:
- Identify and celebrate the super users that bring the most referrals, and the highest quality of referrals.
- Take the guesswork out of your scheme. When you go to close a quarter’s worth of incentives, you have data and reports to reflect on. No more guessing.
For most companies this data just slips away. Not everyone has the knowledge or the skills to capture and use the data they generate. Platforms make it simple to find, house, and act on that information.
4. On-site customer referral programs
If you don’t ask, you don’t get. If you generate plenty of web traffic, lean into what’s already at your disposal and ask your users for referrals.
Simple on-site referrals
For a simple on-site referral scheme, use a similar process to the email scheme we mentioned earlier.
Build a web form in your email marketing software. The web form will trigger the referral emails we mentioned earlier.
Insert the web form on your site alongside a message prompting the user to make a referral, offering a reward for both parties when the referral spends money. When the user becomes new business, you marry their referral up to the referee and distribute rewards.
Simple enough when you know how, right?
The next level
Instead of offering a traditional reward or discount, offer free products. For instance, if you sell access to software, offer a free month for new customers.
Considering also offering a free month for customers that generate multiple referrals. For instance, if your customers can generate ten successful referrals, their next month’s subscription is free.
How much you offer should be scaled against how much it costs you to administer the accounts for the referral clients. Unfortunately we can’t make that decision for you without learning more about your business.
Pick the right rewards for the deal
Gift cards and vouchers
We stock and sell cards and vouchers (and reward codes) because we know they work. And our thousands of clients agree.
They make it incredibly simple to incentivise a diverse user base to take action and reward them afterwards. Let the audience pick their own rewards and they’ll always have a gift they’ll love.
When you’re trying to motivate someone to action, cards, codes and vouchers make a great bet.
Merchandise is a simple, but often an extremely effective approach. Desirable consumer goods like tech, design apparel and sporting equipment are cheap heat. They’re desirable enough to spring the right audience into action.
Or, as we pointed out earlier, if you sell software, that also makes a great reward. Particularly anything sold on a SaaS model – the easier it is for someone to get started, the more likely they are to stay.
Travel generates intense motivation. One of the most inspiring and tantalising prospects for anyone is a holiday. Especially when it’s a trip they couldn’t have arranged for themselves.
And you don’t have to book everything yourself. Just put the budget aside and a provider (like our Love2shop Holidays team) will take care of all the booking.
Big ticket prizes
If your business is in life’s biggest one-off purchases – property, cars, white goods – a £20 gift card just doesn’t feel like an adequate reward for bringing new customers in.
That’s where our big rewards excel. We can offer exclusive experiences like skydiving, travel or supercar driving. Or VIP events, like big sports events.
They’re the kind of rewards that make sense when your customers bring thousands of pounds of business to your company.
Build a good customer referral scheme today, make it perfect tomorrow
If you can’t automate your referral scheme straight away, don’t hesitate to do it manually and worry about automation later.
Plenty of good ideas die on the vine waiting for someone to come up with the perfect solution. All they needed was for someone to pick up the ball and start running.
If you need any advice, you know where we are.