Referrals are a serious part of marketing. Not only do they carry a seal of approval from the referrer (someone we trust), but it allows us to discover a new brand, product or service that is trusted without having to do the dirty work! Win-win all around.

Using offline and digital methods can help your business boom, especially if you make it easy for your clients to recommend you. I aim to break that down for you, including a real-life example.

Let’s begin with some background on referral marketing. This infographic from Referral Candy explains some great points in why this is so effective based on human behavior.

ReferralMarketinRulesInfographic.jpg

 

Historically, the most effective referral marketing programs have a dual-relationship system whereby the referrer and the receiver are rewarded.

Best in class referral program examples:

  • Dropbox: refer a friend, receive more space and they do, too! Check out this presentation by Drew Houston of Dropbox about this great program.

Details of Dropbox?s Referral Program:

-The referral process was built right into the setup/onboarding process.  The signup was 6 steps, the last being ?Invite some friends to join Dropbox?.

-Sell the benefits. It’s positioned as ?Get more free space?.

-Multiple ways to easily share: Via email, email address book importing, post link to Facebook, Twitter and if it applies, in person with a printed item.

-The Social sharing was prioritized as the first option (above email in the UI).

-Keep the referral loop going:in e-mail confirmations when a successful referral was made, there is a call to action to invite more friends.

-Power users loved publishing their invites to their online followers- it made them look benevolent and cool.

  • paypallogo.pngThe origin of this program came from PayPal began with customer acquisition idea, moved to merchant referral program, then discontinued due to great success with giving money away. The referral program ended in 2003 after much success.PaypalReferralProgram.png

Details of Paypal’s Referral program:

-If you signed up for Paypal, they?d give you $20,  and if you referred a friend to Paypal, they?d give you another $20.

This program was so successful, they received 100,000 users, by referral in one month.

-Even today Paypal is relying on a referral program to grow into China, offering some amount of money for each person a user gets to sign up to Paypal.com.cn, their Chinese website.

Real-Life ExampleBrightBirdTutroingHomePage.png

This is an example I created for my colleague, Heather who has a tutoring business for school-age students:  Bright Bird Tutoring
Heather would like to expand her business and gain more clients this school year.

 


 

Here are the steps to take to ensure a great referral campaign:

1. Decide on the offer and ensure its compelling:

-make sure you’re not competing with any other offers you have out there
-simple is best
-use the rule of reciprocity to tap into natural human desires: we humans tend to do favors for people that have done favors for us. Also, It persuades your clients that their self-interest isn?t entirely selfish and gives them an easy proposition to share with their friends. (?We both win!?)

Heathers’ Offer:

When current clients refer a friend that meets for one hour session, they referrer and the new student receive an hour session, free. The offer is valid for referrals of new students, only and will be tracked monthly on a spreadsheet. At the end of the month, Heather will email parents notifying how many hours they’ve ‘earned’ with their referrals.


 

2. Decide on execution.

There is software you can purchase: www.referralcandy.com that will manage the process and walk you through every step of the way. Or, you can use this blog post to guide you through the basic and brainstorm a new referral idea that applies to your business.
Be sure you ingested both digital and offline methods for a seamless experience.

Heather’s Execution:

Heather can print cards with blank lines for names and codes, using something simple like first and last name for each student that’s participating in the referral program. Each student will have 5 lines under their name. This will correspond to a tracking spreadsheet.

Lisa Taylor

1_________________

2_________________

3_________________

4_________________

5_________________

They fill this card with other students’ names. For each name, they receive a free session.

Tracking
Heather and her team can use this spreadsheet to track each of the referrals. Column on the far left is new students. Top row is referring students.

TrackingSpreadsheet.png

3. Promotion

To fully maximize this program, Heather will send an email to the parents of her clients (ambassadors) and current email list including the following elements:

1.Personalized greeting with ambassador’s name
2.Reminder that they use your product
3.Ask what you want them to do (refer a friend who is not using service) 4.Describe benefit (both ambassador and friend receive free tutoring!)
5.End with a clear, concrete call-to-action (send to your friends)

Heather Email to Clients: 

Subject: Free Tutoring for Woody

“Hi Betty,

Last school year was very successful with Woody earning straight A’s and progressing rapidly on his reading skills. I’m so excited to see Woody in a few weeks for some one-on-one tutoring.

I’m notifying you of our new offer here at Bright Bird Tutoring: earn free tutoring sessions for your kids! For every referral you send my way, you’ll earn a free session for Woody! and your friend will earn a session, too. Each referral must schedule a paid 1 hour session with a tutor to earn a free session for you, up to 5 free sessions can be earned.

Please pass along the email below to those who you think could use tutoring this year and earn free tutoring for your kids!

Thanks,

Heather Cline

Phone: 707-648-2870
Email: brightbirdtutoring@gmail.com ”

?Hi Friend,I thought of you today as you mentioned that kids? name could use some help in school. We?ve had such great success with Heather and her team at Bright Bird tutoring, Woody earned straight A?s and his reading skills have improved dramatically. I think you?d really enjoy the team; plus, she?ll come to you!

Right now, she?s offering a special: free tutoring when you refer a friend. Just mention this promo code:WoodyPowers and your little one will receive a free session. Free session must be accompanied by one paid session. Up to 5 free sessions can be earned.

Hope you take advantage of this!

Best,

Betty Best

Contact Info:
Bright Bird Tutoring
Heather Cline
Phone: 707-648-2870
Email: brightbirdtutoring@gmail.com?

                                                                                           ? Send this Email to Your Friends

Finally, Heather can promote this on social media to spark interest and participation and ask for Yelp reviews.

She can send a monthly email recapping hours earned and further asking for referrals by including a version of the email above. Keep that referral cycle going!


What creative ideas have worked for your business?