When we were debating our referral program at Stride, we batted around all kinds of ideas. We thought the question was simple: “How can we generate as many referrals as possible?”
But as we debated the merits of different programs and incentives, I slowly came to realize that we were approaching it all wrong.
Think for a moment about what a referral is. We call it a “referral,” but in truth, it’s really just a different way to say “recommendation.”
And that shift in thinking changed everything for us.
We realized that manipulating customers into sending us referrals was just another form of slick salesmanship, and we try to stay away from those kinds of BS sales tactics.
In the end, we did implement incentives similar to most of the referral programs you see. We offer a free month (up to 3 months total) for any user who sends us a referral who signs up for a free trial.
But the incentive itself isn’t the interesting part of the story. Let me share with you the philosophy behind our program. As you’ll see, it goes way beyond just providing an incentive.
Principle No. 1: Make Customers Happy
I once talked with a businessman who was intent on improving his “referral program.” Yet, as we talked, I learned that his company was dealing with multiple product quality problems even as we spoke. Just that week he had hired two new customer service reps to field all the compliant calls!
We don’t want to be that guy. No referral program is going to be successful unless you make your customer happy first. We work very hard to make our product as awesome as possible for our users, and you should too.
Principle No. 2: Define Your Target Audience
Stride plays in the CRM market, which we know is a competitive market.
But we believe we bring unique value to a certain type of person. We like to say “We created Stride with the average person in mind, not just the salesperson.”
I tell you that, not to try and sell you my product, but as an example of owning your value. We are the best CRM software for the professional with sales responsibilities who isn’t a professional salesperson.
This is a step I believe a lot of businesses miss. Too often companies just say what they make, without much thought about who they make it for. Here’s a way to know if your company has fallen into this trap:
Fill in the blank: my product is the best product on the market for __________. If you don’t instantly know the answer to this question, you’ve got some work to do before you think about a referral program. And the reason why leads right into principle number 3.
Principle No. 3: Be Ultra Specific About Who You Want to Reach
Once you’ve defined who you’re in business to help, then referrals get much easier.
Think about the standard referral question you normally hear people ask. It goes something like this: “Do you know anyone you could refer to me?”
The answer to that question is almost always: “Uh, well, not at the moment. But if I think of anyone, I’ll certainty let you know.”
That answer is worthless to you. It’s as good as a non-answer, as it almost never leads to an actual name.
Because we’ve done the work of defining who would most benefit from our product, I never have to ask the generic referral question. Instead, I ask this: “Do you know anyone who has sales responsibilities but who isn’t a salesperson by trade?”
Think about that question for a moment. I bet at least one name just popped into your head.
Why? Because I was crystal-clear and ultra-specific about who I asked you to think about. It’s a much easier question to answer than the standard referral question, and produces much better results.
You can do exactly the same thing, if you’ve taken the time to define your target audience.
Bottom line: if you’re actually providing value, you don’t need to BS anyone in order to generate referrals. Yes, it’s valuable to put incentives in place to encourage people to send referrals your way. But that’s the last step in the process.
If you ask for referrals the right way, it’s just good old-fashioned people helping people. And everyone can benefit from that.
About the Author: Mike Kamo is the VP of marketing for Strideapp. Stride is a Cloud-based CRM and mobile app that helps small to medium sized agencies manage and track leads, as well as close more deals. They can be found on Twitter and Facebook.