how to build a customer referral programDo you want to build a customer referral program, but don’t know where to begin?

The process of starting a customer referral program can be overwhelming. But it’s well worth the effort. According to a Wharton Business School Study, referred customers can deliver 16% to 25% higher profit margins versus non-referred customers over time.

Before you set up a referral page and start nudging customers to refer their peers, you need to have a referral marketing strategy in place.

Here are six key questions to ask yourself before you get started, with best practices for a successful referral strategy.

1. What team will own your customer referral program?

Your marketing team should own your referral process. Research from Heinz Marketing found that referral programs lead by marketing were 3X more likely to achieve their EOY revenue goals.

This is because marketing teams are experts at engaging and nurturing customers. They also have the insights and resources to create a seamless referral experience—from the way they request a referral, to how they reward customers when a referral turns into a new customer. Your sales team must be heavily involved once a referral is submitted, but the program should be owned by marketing.

2. Who will you target?

It’s best to seek out customers who have already expressed happiness with your product or service, as they are more likely to become an advocate for your brand.

Some good places to look? Ask your customer service team who your best customers are (check their NPS scores!), or look for customers who regularly interact with your brand via social media.

3. How and when will you reach out?

When it comes to approaching customers for referrals, timing is everything. You don’t want to ask your customers for help too soon in your relationship or barrage them with repetitive email requests.

That’s why the best customer referral programs include:

  • Timely referral requests: When customers express excitement or joy over your brand, it’s the perfect moment to ask for a referral. Follow these guidelines for monitoring customer relationships to identify the right time to send out individual requests. You can also proactively ask your customers for specific introductions to people in their social media networks.
  • Consistent referral nurturing: Regularly communicate with customers by giving them valuable resourceslike product tips, helpful case studies, or opportunities to submit product feedback. Once you deepen your relationship with your customers, they’ll be happy to refer friends. To consistently remind them to referwithout annoying theminclude links to a referral submission page in your email signatures, your weekly newsletter, your customer login page, or put a “Referrals” section in your advocate marketing program.

4. How will you get customers thinking about submitting high-quality referrals?

It’s important to ease your customers into the idea of making referrals, and make the process as easy as possible. To do this, you can educate your customers by:

  • Explaining why you are launching a referral program
  • Helping them develop a strong elevator pitch for your brand
  • Teaching them how to refer a new customer
  • Describing who your ideal prospect is—where they work, their level, challenges, values, etc.

5. What will the process, tools and referral submission page look like?

Before you ask your customers to join your referral marketing program, you need to set up a workflow for how referrals will be handled once they’re submitted.

First, create a referral submission page that your customers can use to send you referrals. This page should provide answers to frequently asked questions about how your process works, and what you will do after the referral is submitted. This transparency will build trust with your customers.

Your sales team also plays an integral role in the success of your customer referral program. Set up a process for them to approach prospects and send updates to the customer who submitted the referral. Integrating your referral submission page with your CRM tool (which your sales team likely already uses), will make tracking and following up on referrals much easier for reps.

6. How will you reward your advocates?

If your customers have offered to go the extra mile to help you win new business, you need to reward and recognize them appropriately for their efforts.

Helping your customers to get ahead in their career, or look like a rock star in front of their boss, can often get you more brownie points than simply giving them a gift card to their favourite retail store. They’ll also feel like you care a lot more about their business if you offer them exclusive access to your CEO, or put their name in lights by inviting them to speak on a panel at your next big industry conference.

Once you’ve answered all of these questions internally, you’ll have a solid idea of how to build a customer referral program that delivers.

Learn how to build a customer referral program

littleblackbook-cover-232x300-transThis how-to guide breaks down the steps for taking your referral process from desperate and awkward to downright irresistible. In this eBook, you’ll learn:

  • The real reasons your customers aren’t giving you referrals
  • How to nurture customers before asking for a referral
  • Creative ideas for generating more referrals
  • How other marketers use advocate marketing to get referrals

Download now