Why run a referral program?
A recommendation from a friend or network connection is a powerful driver of conversion. In research from Nielsen 83% of respondents stated they either “completely” or “somewhat trust” recommendations from their close network (versus 66% who said they trust editorial content or general consumer opinions posted online).
Another study found out that referred customers are on average more valuable for companies than non-referred customers.
Referral programs are a great way to attract new customers that are more valuable than customers you might acquire through other marketing initiatives.
Below are some things to consider before creating your referral program:
Your target group
- Which social and communication channels are they using?
- What are attractive rewards and feasible referral terms for them?
Your referral program rules
- What does the referred customer get?
- What does the referring person get?
- Who is eligible for referring/being referred?
- When are rewards issued to both parties?
- How many times can someone use the program?
The customer experience
- What is the are the different purchase journeys for customers?
- How is the referral program going to contribute to/match with your existing marketing activities, e.g. within a membership model?
It can also help to look around and see what competitors and others in your industry are doing to get an idea of what’s an appropriate reward value, which channels work best and which program rules to consider.
Now, with the basic outline in mind you can set up a referral campaign in Spaaza console.