50 Questions You Always Wanted To Ask About Successful Referral Programs
Brett Tadlock VP of Customer Engagement Schedule Free Consultation
  • Starting a Referral Program is perhaps the oldest and the most trusted marketing strategy. Considering the fact that your products and services are up to the mark, formulating a proper and well-planned Referral Program can bring success for your business.

    Referral Marketing does a lot to influence the target audience through your existing customers. There is no such major burden of Audio Visual or Print Media Marketing. You simply need to take care of your customers’ and employees’ interests with honesty, and they will do the needful on your behalf.

    Now that you know the benefits of a successful referral program, you could be planning one for your business. Or maybe you want to improve your existing referral program strategy for better results. We will take you through 50 questions that you always wanted to ask about a successful referral strategy so you can target great results.

    1 – What is a referral program?

    According to Wikipedia “Referral marketing is a process to encourage and significantly increase referrals from word of mouth”. For any business, the concept of referral marketing needs to be clear in order to plan it correctly. Referring to a product or service for consultation or for any other action always existed. It is a natural phenomenon. But in modern times, businesses are exploring it to a great extent.

    2 – How referral programs work?

    In general terms, Referral Program and Referral Marketing are a way of promoting products or services to new customers through referrals. Though referring is a spontaneous process and it should arise on its own accord, but businesses can influence customer and employee behavior through an appropriate strategy. Referral programs work in a simple way. It’s a method of turning your fans and loyal customers into brand advocates, and accordingly rewarding the referrers. The advocates will engage with their friends, family, and acquaintances on multiple channels and help in bringing the new leads

    3 – How important is it to strategize and spend time to plan a good referral program?

    A survey on the referral program suggests, “92% of consumers around the world say they trust word-of-mouth and recommendations from friends and family, above all other forms of advertising.” Now, to make referrals more effective, brands are engaging in the active promotion of products or services through Referral Programs. Thus, it is mandatory to formulate a strategy that might yield better results in the overall endeavor. These 5 tips to make the best customer referral program will help you to get more insights into it.

    4 – Is it necessary to explore the various types of referral programs?

    You need to keep going with your referral generation efforts through various methods. An array of avenues can be opted to create a successful Referral program. Businesses build multiple referral programs and you cannot afford to leave any stones unturned in order to achieve the desired customer base.

    Direct referrals – It is a simple affair of offering a value proposition to your existing clients in exchange for referrals that turn into clients.

    Implied referrals – This is an indirect way that works in Referral Programs with a hidden agenda of receiving referrals. Make your target audience aware and educate them on the activities you are doing that are in line with their needs.

    Tangible referrals  –  With this referral program, you put a tangible object, generally gifts or free samples, in the hands of your customers with the objective that they can give it to a referral.

    Community referrals – It works with the body you partnered with. Both parties benefit from it. One is in terms of getting leads and the other in terms of receiving a commission.

    5 – How to elevate referral program strategy online?

    With the advent of networking portals and online channels, it is quite evident that an online referral program helps to reach out to a large volume of audience. Along with it, building relationships with the online community is also important, since it plays a crucial role to get more quality traffic on the site. That is why, businesses are moving aggressively to explore the online platforms in order to maximize the effort of leads nurturing and leads acquisition.

    6 – What are the offline referral solutions?

    Offline and Online referral program walk hand in hand in today’s world. People spontaneously render feedback through natural communication and it is considered to be a powerful way to convince friends, family members, and acquaintances. The main purpose of offline referral programs is to spread your brand awareness and increase the opportunity of generating enough sales. For more details, you can refer to this article which talks about how to increase your sales with offline referral solutions rapidly.

    7 – Are there any set parameters that need to be considered for a successful referral program?

    Doing homework is mandatory before getting too far into developing a referral program for your business. Merely starting a referral program will not suffice any purpose. You have to check the readiness of your business from all possible corners – Whether you have a workforce to launch and take care of the referral programs? Do you have any referral program plan? Are your products good enough, so that people will be willing to put effort to refer to others? You need to consider these questions and come up with an effective solution, along with a proper backup plan. For reference review the 6 tips to remember before launching a customer referral program.

    8 – What is the significance of online digital presence for referral programs?

    Referral programs work online and offline. But in the modern era, when people are prone to the internet and online channels, it is quintessential to have a strong online presence. Many platforms are available to initiate a referral program – you can start with a business website and then move on to establish your brand’s presence on social networking sites like Facebook, Linkedin, Twitter, etc. Apart from these, there are several other online channels that can also be explored.

    9 – How often interact with your customers needed for effective referrals?

    Interacting with your customers is one of the most important criteria for an effective referral strategy. You can communicate your brand among your customers via online and offline mediums like – face to face interaction, social media presence, social listening, seminars, etc.

    10 – How powerful word-of-mouth communication can be in referral programs?

    The success of getting referral depends mostly on word of mouth communication. It helps in brand awareness and drives customer growth with optimum ROI. If your customers are satisfied using your product or availing the service you offer, they are bound to refer it to those who have similar needs.

    11 – How to know what your customers think and say about your products when talking to other people online?

    Knowing your customers and offering the products or services in lines with their requirement, will boost the sales process. Many options are available to gauge your customers’ mindset and what they are thinking about your products or services. Taking constant feedbacks from the customers, while they are buying from you, helps a great deal. Conducting surveys to your existing and loyal customers will reflect enough ideas. And finally, after gathering all the required information, you have to work to improve your offerings.

    12 – How to determine the target audience, which is most suitable for referral programs?

    For any marketing activity, reaching out to the target audience is paramount to success. For instance, giving a lengthy novel to a kindergarten kid will not work. Similarly, selling a Rolex watch to a lower income group person will be disastrous. Thus, your effort should be focused on the correct and feasible Demographics. Age, gender, location, income bracket, etc. influence a lot of successful Referral programs.

    13 – How Referral Marketing is different from Affiliate Marketing?

    Both Referral Marketing and Affiliate Marketing drive customer growth for the business. You might have queries regarding the differences between Referral Marketing and Affiliate Marketing. Knowing the subtle differences will help you to define an effective referral program strategy.

    A referral program is mostly about customer engagement. It caters to building a relationship with your customer base to the point, where they consider your brand is good enough to share with their acquaintances.

    In affiliate marketing, the brand advocates might not know the referrals personally and they also might not be your customer. The primary condition for referring your brand is financial motivation. In simple terms, Affiliate marketing is more of a partnership than a relationship.

    14 – What are the gifts that can be given to customers for referring?

    You can give rewards and incentives to your customers to motivate them to continue giving referrals. Your motto should be to satisfy your customers in all possible ways, so that, they go a step ahead to refer your brand to their peer groups.

    Based on the type of your business and your affordability, you have to plan the gifts or offer a value proposition. It is subjective and varies from business to business. Innovations are always welcome as long as it is generating enough interest and helping the customers.

    15 – Are Referral programs expensive?

    For any marketing strategy, financial planning matters the most. Every Business spends adequate time to chalk out the expenses and accordingly makes the investment plan – whether the expenses can give enough return and help the business in the long run. Fortunately, Referral programs are cost-effective and demand less expense, since most of the activities are performed by your customers as per their level of satisfaction.

    16 – To what extent of partnering with an agency can maximize ROI in referral programs?

    The digital world is ever-changing. To remain on toes and to explore the latest trends, partnering with an expert agency certainly counts. It helps in getting rid of any pitfalls due to a lack of experience and expertise.  You will be in safe hands and a successful referral program will boost your business in many ways.

    17 – How important is it to make the referral program easy?

    Complicated stuff does not draw enough attention. That is why, a referral program needs to be an easy solution for customers, to avail of the reward. This will streamline the workflow and thereby call for maximum footfall. Making things complicated will further jeopardize the overall process and lead to a null result.

    18 – Which form of reward attracts the most in referral programs?

    With a gamut of options, you must be wondering which reward attracts the most so that you can implement it in your referral program. Well, there is no such special option which can be considered as an ultimate referral reward. Generally, it has been noticed that monetary rewards draw customer attention initially. It can be a discount on the purchase, lifetime membership plan, service benefits, etc.

    19 – Is regular promotion needed for a successful referral program strategy?

    This is a tactical question and depends on the referral program strategy – what to promote, when to promote, and at what interval to promote. Overdoing anything will irritate the customers and underdoing will not put enough mark in the mind of the customers. Maintaining stability and persistent engagement are the keys to success.

    20 – How to educate the staff for a referral program?

    Your business comprises of people who are your employees, customers, and stakeholders. In general, if your customers don’t know about the referral marketing program, they will not make enough referrals. Your referral marketing program will only achieve the desired goal and success when your employees are well aware of it and can explain it to the customers. To make the referral program successful, it is your prime responsibility to educate the people who are associated with your brand. This will enhance networking and community connection, and also help in disseminating the information regarding the various rewards.

    21 – Does a tailor-made referral program helps in increasing sales?

    Every business has its own characteristics. Similarly, your business must have some unique elements that need to be taken into account while formulating a referral program. While working with a partner, you are always in a safe zone in terms of taking correct decisions, because of their expertise and experience in this domain. Thus, a tailor-made solution always yields greater success. For further discussion regarding this topic, you can check this article on how to make your referral program tailor-made pertaining to the business needs.

    22 – How establishing a strong client relationship is vital for customer referral programs?

    The more you engage with your customers, the more you will get results in terms of repeat purchase and getting referrals. Being in connecting with your loyal customers and providing the solution to their pain points can turn out to be a pleasant experience in the long run. Furthermore, adding a referral program with eye-catching and lucrative rewards will help you to build a strong client relationship. To discuss more on this, check this article on how customer referral programs help build strong client relationships.

    23 – What are the benefits that trigger any business to launch a successful referral program?

    Implementing a referral program can optimize your business’ sales cycle and help in getting qualified leads that will maximize your sales. Instead of making new customers from scratch, availing a referral program will suffice the purpose to a great extent.  It’s a common phenomenon for any business to anticipate the ROI before taking any step and the kind of benefits a referral program could bring, will certainly generate adequate interest in your mind. Let’s take a look at the benefits:

    • Reduces the sales budget
    • Increase the sales cycle
    • Quickly generate new leads and referrals
    • Improve sales revenue
    • Generate better ROI

    24 – What is the secret sauce for a successful customer referral program?

    Preparing the secret sauce seems to be a daunting task. After a lot of AB testing and experiment, you will be able to come to a conclusion regarding the success mantra. To ease out the solution NextBee publishes a research article on the 4 pillars of successful customer referral programs.

    25 – What are the forms of referral programs?

    Referral programs come with different forms – Customer referrals and Employee referrals. The program can be implemented in both cases, but with two different strategies. One helps in new customer acquisition and the other helps in employee acquisition.

    26 – What would be the right time to ask for referrals from the customers?

    Keeping the referral process natural is more appropriate, rather than forcefully implementing it in the mind of the customers. As somebody says – “Travel is always exciting right from the planning phase and continues until the trip is over”. Make sure to contact your clients along each step of the buyer’s journey to let them know you are looking out for them. While contacting your clients, you can also ask for referrals.

    Generally, the ideal time to ask for a referral are:

    • Immediately after the sale
    • During holidays
    • On special occasions

    27 – How making the best customer referral program?

    A lot has been spoken about Referral programs and their benefits. When it’s time for the moment of truth and some real action, some obvious questions build nests in the mind – How making a customer referral program? What are the criteria that need to be included in order to make your referral program the best? Answers to these questions are showcased in this article which discusses 8 tips to make a better customer referral program.

    28 – How employee referral programs make hiring productive?

    You might wonder why a company needs an employee referral program when there are managers and HRs to perform the same functions. The reason is simple – it makes the hiring process more effective. All you need the right candidate for the right profile. And so, now a day, brands around the world are implementing employee referrals to make the entire recruitment process simpler, effective, and more powerful.

    29 – What would be the best practices for a successful employee referral program?

    Since you have already gotten a fair idea about the positives on employee referral programs, now it is time to explore its best practices. Following the same, will help you plan the program easily and effectively. A successful employee referral program talks about certain points that need to be practiced for an impressive outcome.

    30 – How online marketing channels can help to strategize the Referral program?

    Do you know the online source of your referral traffic? Will it help if you have a clear idea about your traffic source? This would be something like eureka if you manage to get the numbers in hand. Once you get a concrete idea, you can boost your referral programs more effectively on those online channels.

    31 – What are the different types of referral channels?

    To grow your referral program through online platforms, you must have a vivid idea about these channels and how they work.  Some of those channels are – organic search, paid search, display ads, direct channels, social media, emails, etc.

    32 – How to expand your sales rep via the referral program?

    How about making your customers as your virtual salesperson? The most powerful marketing tool at your disposal is the customer experience. If the customers like your product or service, they will tell others about its merits. If the customers encounter a bad experience, they will tell others about its demerits. To encourage a customer to share good feedback and be a salesperson of your business, they must consistently experience the best that you have to offer.

    33 – How to increase referral traffic and generate more leads?

    How many ways have you tried to increase referral traffic to your website? Or have you tried a referral marketing program yet? Most businesses have one goal in common and that is to increase the traffic. There are various tactics and methodologies for accomplishing these goals. To ensure your business reaches out to the target audience quickly, you can consider this article on how to increase your volume of social referrals, for more insights.

    34 – What points need to be considered in order to create a referral program that works?

    For successful referral marketing, you have to create awareness regarding the referral program amongst your customers. This is one area where businesses need to focus on. Until and unless there is enough awareness, it is not going to yield good results. It is an effort that has to be maintained and thought about just like other marketing strategies. The following points are quite effective  – make the referral program easy to find; utilize the happy moments when your customers are most satisfied; add a CTA (call to action) button on email signature that will lead to a landing page which talks about your referral program; announcements via email marketing; educate and inform your customers about the referral program.

    35 – What are the rewards that motivate a customer to make referrals?

    The key to the success of any referral program is to understand what motivates the brand advocates to make referrals. Based on the findings, design your program to give rewards that match their expectations. Motivational factors vary from person to person. Here are some examples of rewards that will matter a lot pertaining to the customers’ motivating factors – double-sided rewards where the sender and receiver both gains, monetary incentives, and non-monetary incentives like gifts, coupons, etc.

    36 – How to create an effective customer incentive program for referrals?

    A customer incentive program must be unique, custom-made, and should stand out from the competitors. A question may arise – whether you are aware of the latest trends that work well for an effective customer incentive program? In order to achieve it, the following points should be there in your checklist – what exactly you want to gain from referral program; analyze the activities of your competitors; measurable rewards which your competitors are not providing; surprise your loyal customers with innovative offerings; promote the customer incentive program.

    37 – Which mechanism can help in tracking referral success?

    First of all, you need to define what success means to you. You might have launched a referral program, and now, you must be eager to track the success. Measuring the success rate will help you decide whether your referral campaigns are worthwhile and on what areas you need improvements. It’s not always easy to measure word-of-mouth marketing, but luckily, referral campaigns leave a bread crumb trail, so you can easily follow your campaigns to measure the success by – using unique coupon codes, using google analytics, checking the number of traffic to your blog is generating and much more.

    38 – How important are Social media sites in referral programs?

    One cannot ignore the power of Social media in today’s world. Almost every online activity hovers around social networking portals. Few questions can be raised – Is there adequate participation in social media sites from your business’s point of view? How many members are there in your circle? What are the kinds of activities you are doing in terms of Social Listening? If your business is already working to find the solutions to these questions, then it’s really good. If not, then you must increase your online presence to aggressively push your program through social sites.

    39 – How do you build value with a referral program without giving monetary bonuses?

    When you are thinking about a successful referral program, you will find a lot of referral ideas which may not include money. In the case of employee referrals, monetary rewards aren’t mandatory. Many people want to be surrounded by brilliant and worthy people from whom they can learn, and accordingly excel in their jobs. Even in the case of a customer referral program, you can avoid monetary incentives and focus on some creative elements by offering innovative rewards. It can be extra vacation time, gift cards, discount coupons, movie tickets, etc.

    40 – Do you need a dedicated resource to manage a referral program?

    If you don’t have the technology to help in automating the process of executing marketing campaigns, managing referral activities, and measuring program success, then yes you need a dedicated resource to manage a referral program. Without that technology, someone will be responsible for manually doing all those, and the manual process can absorb a lot of time, resources, and energy.

    If you do have referral technology or an efficient tool, then the answer is typically no. But that largely depends on how big and how dynamic you want your referral program to be. With the right technology, you should be able to build and grow your program without dedicated resources.

    41 – Should you encourage the customer to refer offline or online?

    You need to understand the characteristics of your customers and their buyer persona. Since referrals are mostly done by word of mouth communication, both online and offline medium are welcome. It’s better if you let your customers decide on it. The main objective is to drive leads growth and whichever way it comes is beneficial for you.

    42 – Are there any restrictions on the number of people your customers can refer to?

    You must be thinking about whether you want to draw a limit to referrals if it is a double way reward program. That means you have to offer rewards to your customers as well as to the referrals which are coming from customers’ source. All depends on the need of the hour. If you are in the mode of expansion and want more leads then there can be limitless referrals.

    43 – What is the significance of goal setting in referral programs?

    Defining a goal is essential for any referral program. It determines your achievement and helps in measuring success. The goals can be set based on your business needs, financial investments, and expected ROI.

    44 – What are the interesting referral program ideas and examples?

    Marketing programs are an ongoing process and always go through a testing phase. Referral program ideas need to be innovative, and at par (or above par) with the competition in order to draw as many customers as possible. A well-organized plan with a proper approach and readiness will melt the ice, and take you towards your goal. Check out this article on 10 successful referral program examples for accumulating ideas.

    45 – In order to get better ideas on referral programs which are the informative articles present on the internet forum?

    There are many articles available on the internet which unfolds various tricks and information regarding successful referral programs.  Just you need to do a bit of research and you will land up to numerous resources.

    46 – Are there any disadvantages to referral programs?

    Well, everything has pros and cons. But referral programs are mostly about pros rather than cons. The only problem you might face is that, whether your customers are conveying appropriate information regarding your product or service.  However, it can be resolved by providing enough knowledge about the product or service, so that there remains no miscommunication.

    47 – Is it necessary to be technically sound about the online referral programs?

    Are you a novice in online marketing? Even if the answer is yes, there are no problems as such. Build your own team who will execute the referral program. Or else, you can hire an expert agency to do the job for you.

    48 -Are there any ready-made software available for executing the referral program?

    Several ready-made software is available in the market, which helps in executing the referral programs. Very few of them offer tailor-made solutions that are designed pertaining to your business needs.

    49 – Who is eligible to participate in the reward program?

    You can make it an open forum or you might draw some restrictions. Proper identification of the person who is referring is required and there can be some criteria set by a business. If it is an online referral, having an email id seems mandatory.

    50 – At what time rewards are earned?

    Generally, rewards are earned after the referred person makes his/her first successful payment. In some cases, a business can offer rewards by transferring knowledge and helping the business to build their lead database.

    These questions will take you through a complete journey on various queries you seem to have regarding successful referral programs. Referral programs evolve over time and constant innovations are in the heart of it. To get more insights and effective solutions to all your business needs, you can contact NextBee at  1-800-547-1618

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