How to Set Up a Referral Marketing Program
If you're starting a business, you know how important referral marketing is to your growth. Referral marketing is a proven growth accelerator. It's been estimated that a single referral can increase sales by up to 200%. And it's easy to see why: referred customers tend to spend more than the average customer. And the most important thing to remember is that referral marketing programs are completely free to set up. But if you don't know where to start, don't worry - here are some tips:
First, you must have a great product. The first step in referral marketing is to have a great product. This will protect your reputation. If your customers have no reason to refer your product, you are risking their trust and relationship. It also takes time and effort to run a referral marketing program, so don't rush things. You can also offer rewards to existing customers as well. One of the most famous referral programs is Dropbox. Dropbox rewards existing customers with 500MB of extra online storage space.
Once you've figured out the benefits of referral marketing, you can decide which type of program is best for your business. For example, you can create an in-house program that is run by a team of employees, use a spreadsheet to track referrals, or opt for an all-in-one automated referral platform. Each platform has its own nuances, and your choice will depend on your needs and budget. In addition, check out compatibility, scalability, and cost.
The best referral program
also measures the value of customers gained through referrals. For example, if Dropbox gained a million sign-ups in fifteen months, it would have spent $70 million if each referral brought in a new customer. And if they had spent the same amount, the company would have grown by a factor of ten-fold. But with its referral program, the rewards were not only for the recipients, but for the people who referred them.
If you're planning a referral program, it's vital to choose an incentive that rewards your advocates for each successful referral. This can range from small points to large rewards for their next big purchase. Cash incentives aren't always the best option, but non-cash incentives proved to be 24% more effective. So, how do you decide what type of reward is best for your customers? A referral marketing program
should reward your advocates with prizes that increase in value over time. If you can offer valuable products, referral rewards are a great way to build customer loyalty.
Rothy's is a great example of a successful referral marketing program. The company sells luxury goods that are made by the same companies as the top brands but without the brand logo. When it launched in 2017, there was a massive waiting list, but it used referral marketing to bypass it. One-in-four referrals became members of the company now has a new referral program after its launch. Its success was so great, in fact, that it's expanding its referral program with new members.
Keep reading on https://en.wikipedia.org/wiki/Marketing_plan
and most importantly, convert your knowledge into action, otherwise it remains a source of untapped energy as well as wasted potential.