Referral marketing has proved to be one of the most effective marketing strategies after many trials and tribulations in the current online marketing scenario. It involves rewarding customers to promote a business’s products or services to potential customers. It harnesses the immense power of word-of-mouth marketing and has a proven track record in converting that marketing into sales. Like most businesses, you also want to jump on the referral marketing bandwagon.
But among all the referral marketing programs on offer, which one is the best fit for your business, and which one provides the best conversion rate? This article will help you find complete answers to all your queries.
Here are the optimal referral marketing programs to maximize conversion rates
- Provide store credit to customers whose referrals lead to new customers
The most popular referral program is the one in which the customers who can bring in new customers due to their referrals receive store credit from the business. Any successful conversions can be rewarded with store credits to the referrers. The said store credits can be used to purchase further products and services from the business. This is a win-win situation as the customers get the products at a discounted price. In contrast, the organization sells more of its products and services and also benefits from new customers. The e-commerce sites that sell a variety of products can employ the following business model.
- Give referrers an upgraded product or service
The customers with successful referrals can be provided with an upgraded plan or version of your services or products. This will be a great incentive for the customers and help businesses by providing a low-cost marketing tool. Providing upgraded services will not cost anything to the business. This program can be implemented very successfully by SaaS providers.
- Provide benefits regularly
The biggest incentives to customers for referrals can be provided in the form of rewards, which the business will regularly give. The greater the referral conversions of a customer, the more benefits he or she will receive at regular intervals. In the financial space, brokerage companies have applied this model successfully.
The current customers get the benefit of bringing in new customers in such a scenario. They receive a part of the brokerage collected by the new customers.
- Different tier membership programs
Businesses can create a multi-tier membership program that provides greater benefits as the tier increases. The customers are upgraded to the respective tiers based on the number of successful conversions they provide to the business. The tiers will follow a pyramid structure. The customers with the most successful referrals will be provided access to the highest tier of services, with a few select customers. The remaining tiers will have a maximum number of customers, with the lowest tier having the highest count of customers. This will result in a competitive spirit among the customers and lead to a greater number of referrals.
The multi-tier model can be applied for membership-type services like a commercial gym. The higher tiers can get services like a personal trainer, spa sessions, or free aerobics classes.
- Mystery boxes as rewards
Many businesses want to engage a younger demographic in their referral program. To attain that objective, they gamify their referral marketing programs to attract their attention. The mystery boxes have the thrill of a surprise, which keeps the younger audience captivated and invested in providing successful referrals. Businesses that do not have large amounts of capital to invest in their marketing efforts can use these techniques. Since most mystery boxes contain rewards of relatively low prices, the whole referral marketing program proves to be quite inexpensive for the business.
- Conduct a high stakes referral contest
This is a referral program that can only take place periodically. A contest can be held, which offers significant prizes to the people with the most number of referrals within a fixed amount of time. The prizes can range from vehicles and expensive smartphones as the top prizes and then progressively lower-priced prizes for lower referrals. Although this may have a greater cash outlay upfront, it is a highly effective referral marketing strategy.
- Give incentive to the new customers who availed the referrals.
This program offers a win-win situation to the customer. A successful referral can provide greater outcomes. i.e., rewards for both the referrer and the new customer, benefitting the referral. This creates a great incentive for customers to share referrals with family and friends, with the hope of benefiting their close ones. More often than not, the referrals get converted into this program. Although this results in double the rewards, the business gets a more assured prospect of their referrals being converted successfully.
- Donate to charity for every successful referrer
This program displays the humanitarian side of customers. Some specialized businesses have a certain target audience. These customers don’t feel incentivized by the types of rewards offered by the typical referral marketing programs. Those businesses can offer to donate a certain sum to charity every time a person makes a successful referral. This strikes an emotional chord with the customers, and they happily refer the business to their contacts. This has the added benefit of adding to the social value of the business.
Now move ahead with the perfect referral marketing program for your business without any hesitation.
You already know the great benefits of referral marketing. It has been proven over, with some of the most prominent digital organizations using it to their significant advantage. With the added knowledge of the best referral marketing programs, you can apply it to your own business and experience its miraculous benefits. Once you go the referral marketing route, you will never feel the need to try another marketing strategy ever again.
These are just some of the best referral programs. Other potential solutions can entail much better returns for your business. Start implementing one of these programs. You will soon find the one perfect for you.