“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.” – Mark Zuckerberg
The very statement perfectly defines the significance of customer referrals. We all know that a customer referral program is important for a business’s growth, but how important it is, we seldom think of that. Even though Mark Zuckerberg has very aptly put our thoughts about the importance of reference into words, there must be some reasons behind Mark’s claim.
Let’s explore that… And, in the process, you will also discover the answers to these questions. – What makes a customer referral program successful? Is it good customer service? Or is it a constant reward? – How do you know what works best for your company? How to win customers’ hearts and address all their issues or needs?
It is believed that in B2B business, more than 75% of the leads convert into deals if they come from referrals. When someone refers to your product to their friends or family, it is more than four times likely that they will make a purchase.
A good referral program can help your business make it big if implemented strategically.
The real magic happens when a referral program is powered by machine learning. With the help of AI-integrated technology, referral programs become two times smarter. They can help you convert customer data generated from web-forms, query sheets, email responses, and calls into more refined information. Using this information, you can find out how to best cater to their needs.
AI-integrated referral tools are automated. They reduce the amount of manual labor required.
Automation does not only reduce the errors and improves accuracy but also help you greatly in cutting the unnecessary expenses and usage of manpower.
Automation through Machine Learning and Artificial Intelligence multiplies the productive capabilities and makes your operational profits grow tremendously.
Doesn’t this sound great? Of course, it does.
Now, let’s dive deep into the subject. In this article, we will discuss what makes any referral program successful for your company and your customers, how you can reap the benefits of the referral program; and discuss multiple ways to launch a referral program successfully.
The following topics are covered in this article:
- What makes a referral marketing program Successful?
- Features of a referral program
- Benefits of using a referral program
- How does a referral program empower a business?
- What use do AI and ML-integrated tools have?
- Why Should You Include Customer Referral Solutions In Your Business Plan?
- Checklist for a successful launch of an AI-powered referral program
What Makes a Referral Marketing Program Successful?
A robust referral marketing program should have features that can easily reach out to your customers, employees, and partners. It will help advocate and promote your brand by referring to your valuable products.
When a partner, employee, or customer endorses your brand and directs people to you, this recommendation is of the highest quality since it comes directly from trustworthy sources who understand the brand.
Above all, the referral program that works is one that will show you the difference between the results form before using the program and after its implementation.
A good referral program can give your business an increase in profits, which can range from anywhere between 25% and 95%.
Even though there is no single program that fits all, there are some basic features of a good customer referral program.
Let’s explore the features of top Customer Referral Solutions that make it a better alternative to other solutions.
- Social Engagement – A robust Customer Referral Solution is one that can manage and optimize customer engagement journeys for generating referrals. It should also bring in brand loyalty. Such a program can easily be integrated with social media, where customers can share their positive experiences and spread the word about the customer service they received.
- Actionable Data – As the solution acquires data from multiple access points, it gathers rich information about clients. These data collection activities formulate a strategy of deciding what schemes to use, which incentives or rewards motivate customers the most, and encourage referrals.
Data Analysis and predictive behavior modeling are used to identify the most important touchpoints allowing you to easily make adjustments and changes as the program matures.
- Gamification – An up-to-date program with the latest technology allows you to use tested gamification modules such as Badges, Idea Boards, and Leaderboards to increase the motivations of customers. Gamification and visibility of progress encourage customers to engage themselves more with your brand. This scheme is based on the assumption that customers value community, feedback, achievement recognition, and immediate gratification over others.
- No Commission on Rewards – A good referral program or software comes with flexibility in reward choices. Although flexible and easily adjustable, these rewards are driven by data, not revenue. Reliable referral programs never charge any reward commissions; they are transparent and benefit the customers.
- Personalization Backed By Machine Learning – A referral program should help you develop better and long-lasting relationships with your customers. However, to do that, the program would need customer-specific information. Without analytical data, it’s very difficult to know which activities or rewards create those relationships and those which are a hindrance. The best program will utilize Machine Learning Attribution Modeling, a system that gathers data from your previous engagement efforts to create guidelines. These rules allow you to analyze your data quickly, accurately, and efficiently and take necessary actions.
- Integration Option – A comprehensive customer referral program should easily integrate with three main areas for success- sales, marketing, and website or social media.
- Easy to use– Efficient customer referral programs don’t require a developer or a technical team from your end to make the tool work. These tools are easy to use and comprise the simplest of data transformations and calculations. These programs can uncover valuable information with minimal interference from your staff. You need to only invest a small amount of time training your employees, and you’re good to go.
- Email Marketing Integration– Some platforms can be integrated with Email marketing as well. When it comes to email marketing, the more you understand marketing strategies that work for your target population, the more likely you are to keep earning from customer referrals. The best referral programs use AI to determine the best way to use emails.
- Social Media and Website data tracking- The highly rated customer referral platforms track website and social media metrics and traffic. With this information, you can optimize performance and target customers better. The data analysis integrated into the systems will help you improve key metrics like traffic, optimal conversions rate, timings, and find ways to capitalize on your webpage and social views.
The features mentioned above and functionalities are just the tips of an iceberg. There is certainly more to it.
Before settling down on one, make sure you have tried other popular and efficient customer referral tools available in the market. With the myriad of options that are available today, you are sure to hit luck in finding the most well-suited customer referral tool for your business.
Now that you have gotten a profound idea regarding the features of referral solutions, here is a list of benefits that you can yield by launching a referral reward solution for your business.
Benefits of Customer Referral Program
Customer referral program, which is also known as referral marketing, is one of the easiest and fastest ways to gain new customers and seal your relationship with the existing ones for a lifetime. Constant rewards are indeed motivating for customers, but there is more to a customer referral program than this.
Some of the impressive results that referral marketing solution may provide your business are:
- 4X higher conversions than the usual marketing methods
- 35% increase in conversion rates when it comes to referral purchases
- Referrals bring in highly-valued relations. Referred customers hold a 16% higher lifetime value than their counterparts, the directly acquired customers.
- In case of referrals, there is an 18% lower churn rate.
With all the benefits of a referral program highlighted, you may now be wondering about the ways in which it will affect your business. Let us see how, as a business, you can make most of a customer referral program.
How Does Referral Marketing Solutions Empower Business?
Using a robust customer referral program gives you an upper hand over your competitors. This is so because, with the help of analytical tools, you can use the gathered information to your benefit and implement better practices to boost your profits.
Implementing referral marketing software helps to grow your business effortlessly. Some of the ways in which it empowers a business are:
- Guiding and nurturing referrals through the buying process
- Creating a database of your customers and prospects
- Running a thorough analysis and learning more about their preferred communication platforms, buying tendencies, and purchases.
- Creating loyal and lasting relationships through better engagement and communication scope
- Incentivizing your prospects and advocates with more suitable rewards
- Motivating repeat referrals by implementing a more advanced reward structure
- Integrating your existing CRM to provide customer engagement opportunities and optimal sales visibility
- Keeping track of customer performance, maintaining incentives, and adjusting for success
- Empowering marketers to send a steady flow of leads to their sales teams
- Resolving the challenges faced by the salespeople to find qualified leads
A comprehensive referral program makes it easy for you to increase your profits. While in the past, the majority of the toiling was done by employees, the technological revolution has made that easier with the use of ML and AI. Machine Learning and Artificial Intelligence integrated software to speed up working processes and deliver promising results in short periods.
Let us navigate through the importance of having ML and AI-integrated customer referral tools.
Why Use AI and ML-Integrated Tools: Highlighting the Importance of AI and ML in Customer Referral Programs
AI and ML are a direct gateway to research and development.
Research is conducted regularly by businesses to stay up-to-date with the rising trends and growing each day. The businesses that are not making any progress have lesser chances of survival, and each business needs to be on their toes if they want to survive in this highly competitive world.
Machine Learning makes it possible for businesses to conduct research highly efficiently. It ensures all data is stored with utmost accuracy, making sure nothing is neglected. Researching with precision is the only way to obtain optimal results.
Research also gives businesses better insight into the market trends they are looking to influence and derive their strategies accordingly. This is done to make sure they are getting the right clientele and influence over the market.
In addition to ML, AI, or Artificial Intelligence, also plays an important role in making the research process smoother, more profitable, and cost-efficient. It is not only more accurate but also highly productive and time-saving.
The benefits of AI do not end there. AI is also beneficial for researchers to cut costs, or external surveyors to monitor past purchase trends to predict future revenues.
Artificial Intelligence is the ultimate solution to get the most accurate results with a visualization that will enable you to make better decisions for your business’s growth.
In all, the best part about Machine Learning and Artificial Intelligence is that they not only inform you about areas your business is lacking in but also gives you a solution to existing and upcoming issues. This helps you to troubleshoot problems quickly and derive better solutions.
Artificial Intelligence helps you to arrive at the best strategy with the most viable and cost-efficient solutions. These solutions can be related to any mistakes you had been making previously or any changes in the work environment you would like to initiate, depending on the changing trends. No matter what your reasons are, AI will make the venture more profitable for you.
Integrating two of the best systems available in the tech world today, you are taking change-makers by your side. With AI and ML on your team, not only will your profits boost, but you will also be able to bring in the revolution in referral marketing that you have always dreamed of.
As mentioned above, any referral program should be implemented with a purpose. The purpose could be to improve customer relations or to boost profits. No matter your reason for taking the leap from traditional service to AI-integrated system, a good referral program is a must for your business on all fronts.
Look at some of the reasons experts recommend will be improved by implementing referral programs into businesses.
Why Should You Include Customer Referral Solutions in Your Business Plan?
Referral solutions are an organic process, like typical marketing practices, in general. Even without the marketers being directly involved, the number of customers keeps increasing. This is because of referrals.
No matter what kind of experiences we have, we like to share them with our friends and family. And this reference or a mention of your brand works like a promotion.
Referral marketing is a deliberate process where you make sure that your customers and advocates tell their friends about their excellent experience and what your brand has to offer.
If you are looking for more reasons to consider implementing a referral software, here they are:
- Referrals bring 65% of the new businesses: Traditional marketing strategies entail active participation of marketers and promotion of the brand. But referral marketing can bring in many new and steady customers, without the interference of a marketer. And the best part is that it is inexpensive, which translates to more profit margins for your business.
- It is economical: Referral marketing is cheaper than other methods of marketing and promotion. There is almost no need for design assets, so your expenses are reduced in that domain. A small amount is needed to offer referral benefits to the customers, which is negligible, considering the returns.
- Referral marketing is measurable: The data you gather from your referral program is measurable. It is easy to track down where new business is coming from, even when it is a word-of-mouth marketing. Referral programs help in tracking ROI and collecting data about your valued customer.
With the help of the program, you can keep a track on how many times a customer referred your brand to a friend, and note which of the new prospects were converted into customers. The process begins by monitoring new customers’ buying trends, referred to by their friends and family network.
- Referral marketing helps your customer become your best salespeople: Because they have the first-hand experience of your services and products, your customers are a reliable source of information for other prospects. Their opinions will be more valuable to their friends and family than your advertisement. If your services and products fit a client’s requirements, they become loyal and thankful to your brand.
- Referred customers are more valuable: Research states that a referred customer’s average value is higher than that of a non-referred customer. The initial amount spent on giving out referral rewards to your customers is a meager amount considering the profits you will be getting from referred customers. The clients who come in through referrals tend to last longer than customers from any other source. The chances of having a lasting long-term relationship are also higher with referral clients than any other.
Upon implementation, a comprehensive customer referral program can bring in profits and rapid growth from all directions. You must have already made up your mind about getting a reliable customer referral tool.
Before you embark on the journey to adopt the new application, go through the short checklist we have curated for a successful launch of an AI-integrated referral program.
Checklist For a Successful Launch of an AI-Powered Referral Program
AI technologies are ever-evolving with dynamic possibilities.
For any tool to give its best, whether AI-integrated or not, its working environment must be that of furtherance and dynamism.
Before the implementation of an AI-based smart referral program, make sure you carefully consider the following factors.
- Foster A Cultural Shift Within Your Organization
Your organization needs to explore ways to bring in the AI-enabled referral programs into your daily practices.
AI can indeed bring new insights, enhance your decision-making, and increase the success of your referral program if implemented correctly.
However, implementing AI requires an intrinsic strategy to deploy an organization-wide cultural shift to help your workforce understand how AI aligns with your business requirements.
Ensure that the work environment fosters quick adaption of the tool in the workplace, and proper training is given to employees so that they can make the most of it. Have an IT team at your disposal to address upcoming questions from employees about the program.
- Integrate and manage your data before AI adoption
To fully utilize the benefits of an AI-powered referral program, your business requires a focus on efficient data management, governance, and storage.
Data has always been the building block of any company’s progress. An AI-enabled referral program will derive autonomous insights and enable your business to work in ways not possible with conventional solutions.
Ergo, your organizational data must be appropriately tagged and cleansed to fuel your AI models. Before launching any AI project, optimize high-quality datasets to integrate them and obtain the accuracy required for projects.
- Don’t think about the ROI
Business owners have to think about return on investment and total cost of ownership when adopting new technology.
With AI being an advanced and evolving field, it’s essential to pilot new projects with an optimum strategy. Allow your teams to participate in the process without thinking about a quick ROI.
Implementation of AI in your referral programs should start small to help your workforce get acclimatized with the concepts and discover any pitfalls.
- Identify the problems you want AI to solve
For the success of your smart referral program and its optimum usage, it’s crucial to think about the areas your referral program will be helping you in.
You should create specific objectives to know how AI could solve business problems and provide value. The more specific you are about the usage of your customer referral program, the better results it will yield.
We recommend not becoming overly ambitious with referral program capabilities. Once implemented in one sector, you will be able to quantify the results obtained by the program. Using this result, you can decipher better ways to use the program in other sectors of your business as well.
- Be aware of ethical concerns
To successfully launch your AI-powered smart referral program, you have to complement the use of AI with proper governance and ethics, so that your customers know how their information will be used and continue to trust you.
- Accurate and free from bias data (age, gender, race, etc.)
- Compliance with regulations such as GDPR, ISO, and HIPAA
- Respect for information privacy
- The use of AI should not pose a threat to any individual or organization.
Having these 5 things in place will streamline the process of enabling AI-integrated Customer referral programs for your business. Once fully set up, these tools are quite easy to use and take less time to get used to. With the help of trainers, training materials, and the support of all team members, adopting a holistic app will be a piece of cake.
In this chapter, we focused on only some of the capabilities of an AI-integrated Customer Referral Tool. We discussed the features and benefits of a referral program and how it can help a business. We also looked at the benefits of using an AI-integrated customer referral tool and looked at some compelling reasons to include them in your organization.
TO BE CONTINUED…
With the given checklist adhered to, you will be fully set for your journey into a more rapidly progressing world. Feel free to get in touch with NextBee.