6 Reasons why your referral program could fail
As many successful businesses will tell you, positive customer experiences and interactions can often make or break a business’ success. Referrals from existing customers to new customers can be some of the most powerful marketing and loyalty building tools. In fact, more than 90 percent of trusted referrals emanate from customers telling their friends and close associates. But, how do you know if you’re creating the right environments for these valued referrals? Is your ROI being maximized through your existing customer interactions? Are your customers being recognized and treated properly, in order to ensure they will actually pass along your good name to future valued customers? The strength of these referrals has to be cultivated properly, in order to generate the numbers you require for continued success and growth. Don’t miss out on this existing resource by not properly tracking, managing, and supporting your customer base through a well managed referral program.
Customers Are Unfamiliar With Your Referral Program
Awareness is a critical first step in building a successful referral program. How can your customers take part in something they don’t even know exists? There is a fine line, however, between educating and inundating with information. Carefully placed references to your program can pique a customer’s interest, without being intimidating or overbearing. Consider your target audience and what places would reach them best, including:
- Employee email signatures
- Email auto-responders
- Social media profile photos
- Call to action on your website
- Mobile app messaging
Without follow-through, your program will never reach its full potential. When a referral comes in, ask the customer how they learned about the program. With a system of tracking and reporting, your team can gain a clearer understanding as to which of your efforts are working and which are not, as well as uncover other opportunities you might not have thought of. Check out our referral program ideas here.
Your Referral Program Is Too Involved
How many times have you abandoned your efforts, simply because you were required to fill out a form? Or because it required too many steps? The point of this program is to reward your referring customers, not punish them. In fact, anything but a clear-cut and effortless (no friction) process could yield the opposite of its intended results, sending both the customer and their referrals packing.
Your Workforce Isn’t Fully Educated
By nature, most consumers are leery of these types of programs. This is mostly because they have questions. They want to know:
- How the entire process works.
- What is the best way for them to refer a new customer?
- How will the business identify who referred who?
- Who is your target market?
- What is the process for initial contact?
- Will they receive a notification when a referral turns into a customer?
- What’s the reward when their referral turns into a customer?
Your customers should be able to access this vital information across multiple platforms. Answers to these burning questions should be made available on your website. For further questions or clarification, customers should also be able to contact a member of your staff. And, since industry experts cite subpar employee education as one of the top reasons referral initiatives fail, it is critical that you properly educate your staff regarding the intricacies of the program. After all, how could you possibly invoke trust in something your workforce can’t explain?
Incentives Don’t Incentivize
To lead an organization to success, you must first understand the customer. What do they need and desire most? How can your SaaS referral program add value to their lives? When determining your target audience, take it a step further and learn the answers to these questions. It will go a long way in supporting your project.
Keep in mind, most consumers want to put forth as little effort as possible. Accordingly, your customer incentives should be closely monitored for success. If you aren’t seeing the customer responses you want, investigate your incentive program and work to make it more attractive to your customer base. How could you possibly manage a successful referral scheme when you’re offering a bonus that is sure to go unused or underappreciated?
Consider the following when developing your rewards strategy:
- A simple thank you, either verbal or written, goes a long way towards making a customer feel appreciated.
- Make your referring customers feel part of something bigger by offering them early access to your business’ new products or service upgrades.
- Offer personalized rewards that can enhance their lives. Gift cards are common rewards and are well received.
You Haven’t Built a Trusting and Engaging Relationship
The most valuable relationships are built on trust. But trust doesn’t come overnight. Just like any relationship, the bond you build with your customers takes time, effort, and an open line of communication. As part of your initiative, develop a way to directly engage your clients. Give them an opportunity to share their experiences, questions, concerns, and triumphs. Remember, communication is a two-way street. To really gain their trust, you must also share with them. Let them know exactly what the organization’s goals are and where they fit in the picture.
It’s a Numbers Game
As the old adage says, don’t put the cart before the horse. It doesn’t matter how solid your SaaS referral program’s strategy is; if you don’t have enough delighted customers, the program will fail. According to Google studies, B2B purchases can be as high as 92%, when a positive referral is involved. Equally, B2B purchases for technology software and equipment can be in the 60% range, when favorable reviews are given. If you aren’t getting positive feedback, whether from direct messages, online and printed reviews, or ratings, go back to the drawing board and determine how you can build a solid foundation of happy clients. It is the cornerstone of every great referral program.
Customers love being recognized for their loyalty, and can almost be considered an extension of your workforce and business model if properly recognized and rewarded. Something as easy as a thank you note or in house recognition can push a customer to become a powerful advocate for your business. These relatively minor concessions can often move a customer base to recognize and champion your brand or business, resulting in substantial returns and overall growth. Build loyalty and respect as often as you can and you’ll see your customers build your business, in return.