How to use Referral Marketing to Generate New Leads
Businesses emphasize their products too much.
From its price to its appearance, and even how it feels. But is this good enough?
Not even close. Because your successful competitors do more than that.
Awareness, which is often overlooked, is the most important aspect of your offering. How can people purchase a product they aren’t aware of?
You need to make them aware first. And you can achieve this with referral marketing. It’s how your target audience learns about your services or products and visits your website.
Referral marketing is one of the most seamless ways to generate leads for your business. It is a strategy used by major brands like Airbnb, PayPal, and Uber to push traffic to their platforms.
Take Uber, for example, drivers can earn up to $2,250 as a reward when they refer the service to their family and friends who sign up as drivers. And everyone can testify about the success of the brand.
Like so many other top brands in various sectors, Uber has redefined lead generation via referrals and the data agrees with them. As 92% of people trust recommendations from individuals they know.
That’s a huge percentage to ignore!
As should quite obvious now, referral marketing is great for generating fresh leads for your business.
Here are six unique ways to use referral marketing to pull in fresh leads.
Get Email Addresses with Referral Marketing Forms
Email addresses are hidden gems for sales professionals and marketers. And just like you have to mine hard to get diamonds, you need to do what is necessary to get email addresses, which can be an extremely draining process that involves continuous drilling all over the internet.
However, referral marketing signup forms simplify the entire process of getting your target audiences’ emails.
With this strategy, you can request your current customers to send people to your platform in exchange for a reward. And also persuade their referrals to fill up your online form.
Not to mention, you can acquire a lot of email addresses and additional contact information.
The strategy functions by acquiring leads that are connections or friends of your current customers. And succeeds solely based on the relationship between the referrals and your customers. Because they are sending people they know your way, their referrals already trust you.
This means that you don’t need extra persuasion to convince the referrals to sign up. They will be willing to do it by themselves because of their relationship with the advocate (your current customer).
Once they’ve signed up for your email list, use your email marketing service of choice to create an automation that continually engages them with your content and advocates that they not only refer others but also utilize your software or service further to retain them.
Encourage Your Advocates with Valuable Rewards
One of the reasons referral marketing is so effective in generating leads is that it offers advocates rewards for their recommendations of your service or product.
This is necessary because simply asking your customers to send their friends and family to your business without giving anything in return won’t work. If you go that route you’ll discover that most customers will hardly move an inch or simply forget.
If you want your customers to be proactive about referring people to your brand, there needs to be a reward. And no it doesn’t have to be a painstaking process. You can use referral software to automate the process.
That said, what you give your current customers as a reward for sending you referrals is termed an incentive.
And it can be anything but must be valuable to your target audience. Your incentive can be a gift card, cash, discount coupon, a free product or service, optimized content, and a lot more.
For example, Airbnb gives $25 (cash incentive) to customers who refer friends to their business.
Also, if you sell digital products (e.g. online courses), you don’t have any incremental costs. So you can offer more generous discounts and cash rewards to your advocates.
But keep in mind that the incentive or reward you pick must be something that your audience desires or would want.
For instance, if you sell toys for toddlers, and you offer a free electric screwdriver (moms are your target audience and customers) as a referral reward, the idea will massively fail. This is because the incentive is undesirable to your target audience and current customers (moms) so they won’t be motivated to take action.
To know what your target audience wants as a reward or what they will value, look at the most popular products you offer, as well as, your sales.
Next, find out the purchasing behavior of your current customers, and the pages they browse to the most.
All this will make clear the kind of reward they will find valuable and that will suit their desires.
Reward the Advocate and Referral
Referral marketing rewards shouldn’t just be for customers who refer people to your business. You can reward your leads, as well.
Here’s why. If you just offer incentives to advocate, the lead may not have enough motivation to sign up or buy from you.
Here’s what I’m on about.
The advocate refers someone to your business and gets 15% off every month for the next 6 months of your service. The person they refer to your business also gets 15% off.
The result of this is that no party feels left out. And everyone feels that the deal was beneficial to them. This will also result in a long chain of referrals because the previous referrals would also want to continue the process and they’ll send other people to your business.
Think like the customer and your target audience. Imagine if a colleague was referring a service or product to you and the person was getting a sizable discount for doing so, the question would be–what’s in it for you?
Of course, because an acquaintance or friend referred the service to you, you’ll have more trust in it. But is that trust enough to drive you to make a purchase?
As you have to give your advocate an incentive to motivate them to tell their family and friends about your offer, your leads most times require you to do the same.
So you may want to consider rewarding both the advocate and the lead who is referred to your offer in your referral marketing program just like Dropbox.
How does this boost your leads?
Rewarding your leads will generate more referrals. Because they will get something out of signing up to your website. So they have a higher probability of taking action when requested by the advocate. The great part is that it doesn’t end there.
Leads can also talk about your business to other people encouraging them to take the same action. Especially, if your referral program offers rewards to advocates. They will also want the rewards that belong to advocates, as well.
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Offer Rewards Triggered by Milestones
If giving rewards is too costly for your brand. There is a way out. Rather than offering a reward for every purchase or sign-up, you can incentivize several actions that the advocate has done.
By incorporating this method into your marketing strategy your rewards won’t go down the drain and you will only be rewarding those who generate results that are most profitable to your business.
The advocate or referrer has to satisfy certain requirements or get to a milestone before they are eligible to get the reward.
This structure will help to control the number of rewards fulfilled per time, which in turn, helps you keep your budget in check.
However, this can have its drawbacks. While it’s great in controlling your budget you may discover that some of your current customers will ignore your referral program, as it is too difficult to achieve the reward.
This most times works smoothly for brands that have a massive market for their services and products. And their customers already trust and love the brand enough to promote it regardless of the processes involved.
Otherwise, customers may not be so eager to promote a platform that won’t reward them for their efforts right away.
You may want to keep the milestone simple just like Amazon did with their Prime referral program. The customer gets a $5 for their next purchase when they get a referral to sign up and make a purchase worth $5.
So how does this generate leads?
This type of referral marketing system can seamlessly generate leads for your business if you combine it with top influencers or affiliate marketers. This is because such individuals can redirect huge numbers of people to your website.
If your reward is mouth-watering enough influencers and marketers may even want to be added to the competition to win the prize.
Have your Current Customers Make Minimum of 3 Referrals
Do you know that you can control the number of referrals your current customers send your way to earn the incentive through referral forms?
Referral marketing forms are great as they allow you to set the number of leads through the number of blanks. The more empty spaces on the form, the more people your customers have to send you a way to get the reward.
However, avoid making the number of referrals needed so high so your customer doesn’t lose motivation to promote your offer.
The recommended number for each advocate is three referrals. This means that you can ask a minimum of three leads from each advocate.
The result of this is that it drives leads to your platform via the channel of referral marketing advocates. Everyone can send at least three people to your platform and then the three individuals can also refer three more and the cycle continues.
As more people get involved in your referral program you get more leads.
Through the Eyes of the Customer
As we’ve just seen above there so many ways that you can use your fair market and drive leads to your platform. It just requires a touch of creativity.
Always remember to see your referral program through the eyes of the customer.
Try answering the following questions–what incentive would they probably sign up for? What kind of product or service would they like? What is the pain of my target audience?
Your reward should be the answer to these questions and must determine the referral incentive that you offer, as well as, the structure of the program you launch to generate leads.
So if you aren’t running a referral program on your platform but are looking for a way to drive leads to your website, why wait? Start a referral marketing strategy today and watch leads roll your way.