A High-Octane Customer Referral Program Example

February 21, 2015


What would you say if I told you that one simple marketing tactic could help boost your online sales by nearly 10%?

As far as marketing tactics to try, I’d say that’s not too shabby.

So what is this mythical marketing tactic? Well it’s not mythical at all, nor is it a secret. It is a marketing tactic that businesses have replied on since the beginning of time – A customer referral program and word of mouth marketing.

These days word of mouth and refer a friend marketing is made even more effective online and through social media. Not too long ago consumers were limited to their close circle of friends when it came to how much influence they had, but today, those same consumers can broadcast messages to thousands of people in the blink of an eye. But even with this newly empowered consumer the underlying principles of great word of mouth still remain the same.

The secret, if there is one, is not being afraid to ask your customers to do you a favor and recommend you to friends and family if they enjoyed your products and services.

Let’s talk numbers. What kind of returns can these programs offer for a small business that does over a million dollars a year in turnover? Well pretty impressive ones I’d say.

Here is a snapshot of a customer referral program that was launched last fall on a boutique women’s apparel brand that is on the rise and is now doing just under $ 2 Million in annual online sales.

  • 30 days $ 12,600
  • 282 new referral visitors coming from 231 referrals sent off of 630 transactions
  • 21 transactions a day
  • 37% referral rate
  • 1.2 visitors per referral

From a monthly perspective this particular business had a sales volume of about $ 150,000 a month online. In raw numbers this translated into an approximately 8% lift in overall sales that could be attributed to the customer referral program.

These are impressive numbers but the question you probably have is – How did they get there?

When it comes to a customer referral program, or any marketing program for that matter, there are two elements that you should always keep in mind.

1. How you ask

When it comes to the communications that you send to your customers. First thing’s first. It should sound like you. In the case of the apparel brand we’re looking at, their brand was centered on a message of quality. Likewise the referral emails reflected that and re-enforced that quality products value proposition.

The imagery used in the email was from the same image catalogue as the imagery found on their website and in store as well. Using the same type of graphics and imagery in all your different marketing channels helps to maintain a consistent customer experience across all channels. Be that email, in store, online and in social media. Consistency counts.

Finally a few more quick pointers when it comes to crafting your email messages.

  • Define the goal of the email. Customers shouldn’t have to work to determine the action you want them to take (in this case the action was referring their friends)
  • Write a great subject line. This is the first thing customers will see. An easy trick is to have this subject again reflect your core value (in this case quality)
  • Craft the introduction to keep them interested and get them to keep reading. A personal touch makes a difference here. Sound like a person, not a robot.
  • Keep it short! If your email is too long and it seems like a lot of work to read it, people will skip it and move on

2. When you ask

There are certain points in the customer journey where customers will naturally feel a much stronger sense of loyalty and satisfaction. Tuning your customer referral program to take advantage of those periods can go a long way in getting more (and better) word of mouth from your customers.

In particular there are two key moments in that journey that are excellent times to solicit customers to refer their friends.

  • Right after a purchase. This is the point in the customer journey where consumers will still be on their discovery high. We’ve all felt it. We just found a great deal or an awesome new vendor online and we’re in the moment of happiness right after we hit submit on our credit card form. While we eagerly await our purchase to arrive, this is a prime opportunity to tell our friends about our new purchase.

  • After their initial experience with the product. This is probably the ideal time to be asking customers for referrals and recommendations. After receiving the product and enjoying it for the first time, most of us can’t wait to tell each other about the amazing new products we’ve just gotten. Take a look at your own Facebook newsfeed. How many posts show up talking about (or bragging about) new toys. Savvy businesses know to take advantage of this window of opportunity.

The science also backs this up as well. It turns out that triggered emails have an open rate that is 4 times higher than other forms of email marketing. So don’t be shy. Reach out to your customers, and absolutely make sure to reach out during these two great moments in the customer journey.

So there you have it, a simple snapshot of what a high octane customer referral program might look like and some tips ot get you there.

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