Why should you use a referral program?
The concept of a referral program is pretty simple – you incentivize your customers to recommend you to others. So when a friend they referred successfully converts as a new customer, you reward the referrer and may be also the referred customer. As a result you get more and more customers.
Running a referral program has many benefits. It is relatively low cost compared to other marketing efforts. Also referred people are more like to become customers. Furthermore a well-executed referral program can supercharge the growth of your company.
Incentives are important
Incentives are the important for the success of any referral program. While there are no set rules about what the reward should be, there are some guidelines that you can follow. If you’re a startup, you might struggle to offer a $50 reward every time a customer refers someone new. Therefore it makes much more sense to reward customers with an enhanced service or free use of your product for a limited time. You could boost your results by offering rewards that help customers get more out of your product.
This is what Dropbox did. The reward for referring friends to Dropbox is more cloud storage. Simple, relevant, and genuinely useful to their customers. It also has a very low cost of execution. This meant Dropbox could encourage multiple referrals from each customer and maximize the impact of their referral program without it affecting their bottom line.
Empowered customers refer more
Incentives are important, but there are other things to consider for success of your referral program. Your customers might love your brand but they might not be remember to refer you. You need to empower your customers to become your brand ambassadors. You need to provide them with tools, techniques and motivation to keep referring you.
This approach also helps customers get more out of your product. Therefore customers are more engaged with your brand and are more likely to recommend you – they become your brand ambassadors!
There are many major brands already using referral programs like Amazon, Uber, Dropbox, Airbnb, Harry’s etc. Why not you then? Create your referral program with TrueSaaS in minutes and as a result empower your customers to become your brand ambassadors.