Do you know that personalized referral marketing generates 3-5x higher conversion rates than any other channels? Sure you do. But do you know how to build a truly personalized referral program? Or, how to measure the success of your referral marketing personalization efforts? Read on to find the answer.
Levels in referral programs are a tribute to gamified journeys, so beloved by customers. They bring excitement and group referrers to distinguish the most precious brand advocates. You can use levels to motivate and engage with an increased reward value as a referrer comes to the top of the referral ladder.
Besides the rewards for referrers, one of the program tiers with incentives should be reserved for your new customers. We call this configuration a double-sided referral program. As more and more brands take it as a standard setup, remember to check if this feature is supported before building your referral solution.
In double-sided referral programs, both referrers and new customers are incentivized. Thanks to this, recommendations are much more than just a word-of-mouth from your happy customers. Their give referrers a real value to endow their friends and family. Ultimately, referral programs aren’t about the number of recommendations, they’re about the conversion growth.
Once program levels divide your referrers into segments, you can get a complete picture of your ideal advocate. Take a closer look at the customers who refer your brand most often and tailor a new campaign or a add new program tier that exceeds their expectations. It can be a ‘thank you' discount or a gift card balance for their favorite products. Taking care of customer loyalty is crucial to keep the most precious audience standing behind your back.
Double-sided programs have brought a fresh breeze to standard referral marketing which goes along with the need for a better-secured campaign budget. Brands and retailers need to control costs of both referral codes and rewards for referrers. In a customized referral program, budget and usage limits should be set separately for each campaign level. For example, codes ‘for sharing’ need to have a 'one per customer' limit when a reward should be active only after referring to a particular number of new clients. Both batches of codes should have a total budget set separately.
Diversity is often underestimated. And that’s a mistake. Truth is, it's hard to find a retailer or brand that doesn’t offer any promotion or referral program. The great majority of the market make promotions. Tons of ‘the best’ and ‘special’ offers flood the Internet every day.
Diversified, surprising rewards and incentives make your promotions stand out and shine amongst boring standard discounts.
When we say ‘promotion diversity’, we mean much more than a mix of coupons and gift cards:
Channels are not only about the promotion diversity. The multi-channel toolkit helps to easily adjust a referral process to the different generations of consumers and their specific habits. They’re vital to making outstanding and personalized customer experience possible on scale. Each day consumers use numerous technologies and devices changing to the channel that suits them while looking for promotions or shopping online. It matters if your referrers can share codes via your mobile app, website, or email. What's more, can they seamlessly change from laptop to mobile phone and still refer a friend with ease? The multi-channel technology is not enough to offer omni-channel experience. You need to make sure that switching from one technology to another doesn't affect customer journey at all. Look at the chart to see why it matters.
As you can see, differences on the top are slight. Gone are the times when only email or website was enough for running a successful promotion. While the world is going mobile, retailers and brands need to keep the omnichannel approach on top of their mind while planning referral campaigns.
It seems like omni-channel referral marketing leads through heavy technological investments. In fact, it doesn’t have to be that way. The next paragraph shows how modern cloud and API-based solutions can save your day and money.
A big pause here. This point is crucial.
The very first thing that comes to mind while thinking of running referral programs is probably “how will this referral workflow fit into my existing toolkit?” or “how will I sync my service providers, business partners, and the website with the referral machinery?”
No doubt there is no point in doing referral campaigns that aren’t consistent with the rest of your sales promotion strategy.
Referral software providers always list their integrations amongst available features. Despite many available solutions, the chances you'll find an affordable option and all your providers on the features list are often low.
This frequently drives retailers and brands to give up the unsupported channels/ providers in their referral programs. What's the other choice instead? There is no silver bullet rule but we have two things to recommend in this matter:
Expressing your gratitude for engagement is a good idea before and after a customer actually recommends your brand. In practice, each message with an invitation to join a referral campaign should mention your ‘thank you’ for every good word shared. In the case of ‘after-recommendation’ thank you pages, they're worth even more effort.
It’s natural you’d like to encourage each active referrer to bring new friends for as long as possible. You should start with creating an exciting multi-level reward schema and end up with personalized messages with incentives and 1:1 thank you.
Having all of these features in your referral programs provider means you can create truly customized campaigns. Question is, how can you track such personalized referral experiences? Let’s take a closer look at the most important metrics saying if your referral schema works or not.
Firstly, you need to know how many of all the invited users have responded to your referral program. Depending on how they can get involved you can measure clicked invitation links, email metrics, or sign-ups. Basically, the goal is to estimate how many of the people who have seen your invitation have made a move towards joining your referral ranks.
In this point, unique referral codes play their part. Basing on how many sharable referral codes have been published to your customers and how many times they’ve been redeemed, you can estimate a referral rate. It shows you:
i) if the incentive for a new customer is attractive enough, and
ii) if your existing customers are willing to recommend your services (if the reward is tempting enough).
RR = number of published codes / number of referral codes redemptions
Score above 1 means your on a very good way to success
It’s very important to measure the effectiveness of each program tier separately. The results point out the flaws of your rewarding schema. You’ll see if some levels are too hard to reach for your customers and where most of them give up next recommendations.
There are many ways of measuring the overall performance of referral campaigns and choosing the best one is an individual matter. The basic estimations come from analyzing the total campaign spent, achieved engagement, and program costs:
total referral spent amount = orders made with referral codes + orders made with rewards
costs of running a referral campaign = referral software + total discounted amount*
*In the case of the double-sided program, total discounted amount = total discounted amount of referral codes + total discounted amount of rewards
The bottom line in every program is to convert new customers. The customization of referral campaigns significantly increases your chances to meet a referred customer at the checkout or storefront. Keeping that in mind, choose a provider ready to adjust to your business and create outstanding experience for your potential and existing buyers.