Referral marketing programs are unlike other customer marketing channels as their performance can directly impact the bottom line. This allows companies to spend time and resources to make sure their program targets the right customer gives out a meaningful incentive and provides a friction-less customer experience.

When investing in this area companies need to consider the following concepts in order to make a referral program deliver results:

-The power of double sided rewards

-Why you should target a specific user

-Picking the right incentive

-How user experience impacts performance

-Why constant promotion matters

Power of double-sided rewards

referral program example 2015
source: referralsaasquatch.com

Making a referral is an authentic and personal interaction between two people. When that interaction involves incentives it can cheapen the message or make it stronger, it all depends on how the incentives are structured.

Giving out an identical reward to both parties keeps everyone on the same level, with no person gaining the upper hand in the transaction. As many users aren’t motivated to profit off of their friends and family.

This reward type fundamentally changes the way a user will interact with the offer. By appealing to a different set of motivations the user will feel more inclined to send an invite to their network.

Targeting a specific user

targeting users in a referral program

When you are looking to get results from a referral program one of the first things you should consider is who you’re targeting. If you work in SaaS you have different subsets of users that will have different product experiences and different motivations to make referrals. Creating a blanket one-size-fits-all program isn’t always the best way to get results.

You want to target your most engaged user-base that is getting real value from your product and is already making organic referrals for your company. Then conduct user interviews to see what type of incentive(s) will motivate them to make a referral.

Picking the right incentive

double sided rewards referral program

As I mentioned above a specific user type will have a different motivation to make a referral and you need to structure your program around that behavior. By testing out different types of rewards in user interviews you can gauge their reaction and find the right reward for your program.

Whether it’s a percent discount, free upgrade or dollar credit you’ll want the user to easily achieve their goal of

How user experience impacts performance

optimizing your referral program

Giving the customer a streamlined user experience will increase the performance of your referral program. Creating friction points like requiring additional sign-in information and unclear call to actions will make customers drop off before making a referral.

It’s just like any marketing optimization flow, you have to improve key areas of the experience in order to make your referral program perform. Testing different call to actions, page layout/design and the amount of steps in the process will all impact the amount of referrals you generate.

Why constant promotion matters

promoting your referral program

You have to create awareness for your referral program. Even if you follow the steps above and create a referral program that users will want to engage with. Promotion is something that all referral programs need in order to deliver results.

In order to direct a users’ attention towards your referral program you should take advantage of channels that they interact with everyday. Inside your product with banners, invite pages and triggered call to actions will get more users involved with the program.

Including call to actions at the footer of your emails (invoice receipts, reminders, blog articles, support tickets) will also increase awareness of the referral program.

 

brandon gains linkedinBrandon Gains is the growth marketing manager at Referral SaaSquatch. He uses a blend of creativity, analytics and code to fuel the rapid growth of our company. You can connect with him by email via brandon at saasquat.ch