New York Times has calculated that almost 7 out of 10 people or around 65% try a business through the referral of their friends. Just think about that for a second. All marketing efforts that you have done only accounts for a little bit more than 3 out of every 10 people.
This is why every marketing team you ask will tell you that a customer referral program is a perfect ladder to success – having people move your brand through word of mouth. Not only is this effective but it creates a level of loyalty between your brand and your customer. What these marketing people tell you, however, is that most of it does not work.
Refer-a-Friend Programs are All About Psychology
Customer referral programs are a weird way to market. You are expecting people to talk about your product and show it to people’s friends and make them buy it, netting a reward in the process. While this sounds a win-win situation for both parties, nobody wants to bother their friends and family into something that they think is not worth it. If you are a new company, there’s hesitation in people if they should share your service or not or is it even worth it, and the psychology behind this hesitation is sound.
Referring brands is a status thing. Like how many people refer Apple, Beats, Prada and a lot of luxury brands, the psychology behind referral is for somebody to show to their friends and colleagues that they care and they are ahead of the pack. Brand discovery is a hard route to take, but it is not impossible. Having a customer spread word of mouth about you for a reward is all about how you position yourself.
Make Them Share When They’re Excited
Many websites try to stash their customer offers in a dark corner in their page, typically at the bottom of a page or in the footer because they think this means the referrer is interested enough to go to the absolute bottom of the page. This is wrong. Put it out in the open! Give your referral offer after a tripwire procedure or sales!
This is the perfect time to do this because emotions are still high. People still have that dopamine from trusting you and they need to share the event to people. Reward them for referring a friend. Uber has a refer-a-friend program that gives their riders a free ride, valued around 40 dollars, for signing up and using the service for the first time.
Make the Invite Worth Both People’s Time
The next thing you need is to make sure you tell your audience what their friends will benefit immediately from the customer referral program that they are doing for you. Be it making them send emails or just taking contacts from them, you need to be upfront with what you will give their friends. If you do so, they can measure who would love to convert to your side, who will need the freebie and who will appreciate the gesture.
Use this social alpha psychology to your advantage and let them feel that they introducing people to offers that can give them a better status among their circles. As an example, both password manager LastPass and cloud storage service Dropbox gives their refer-a-friend system premium accounts for a limited time for both you and your friend, stacking in length depending on the number of friends that use your code. This is a good way to motivate invitations as both services are not only highly valuable but also very practical.
A Sincere “Thank You” For the Referral
Finally, make sure you give both your impromptu brand ambassador and their friend a sincere thank you. It’s always good to give more value to the friends who will accept the invite a strong value tripwire to show them that what they are receiving is something they would want in their life, but don’t forget the person who started the message.
Give them a “thank you” gift. Discounts are pretty common but it should go beyond this, especially as a further motivation and to not reduce the value of your product. Free shipping, store credits, a small trinket like a valuable candle or tickets are very much appreciated, more so than just giving them a few percent off. Make the reward something they can immediately feel and get. This will make them push more for your brand’s “generosity” in its rewards.