The Essentials of Referral Marketing

The Essentials of Referral Marketing

Referral marketing involves managing a company’s existing & past clients as well as it’s advocates to achieve business objectives, such as revenue growth or increased demand generation. It’s a simple but powerful concept: as the power and influence of word of mouth grows in buying processes, B2B & B2C companies of all sizes, industries and niches need to proactively develop and manage their most important marketing asset – their happy customers and fans.

As you plan, build and execute on your own referral marketing program, these five elements will be critical to its success:

  1. Tying referral marketing to your business objectives

Referral marketing can serve a variety of business objectives, so it’s important to tie your program to revenue achievement and specific sales and marketing tactics, such as lead generation, pipeline development and sales cycle acceleration.

You may also want to consider how your referral marketing program can support other objectives, such as customer satisfaction, product/service marketing and product/service development.

  1. Understanding who you’re past clients, current clients and advocates are and what motivates them

 Customers are often a company’s most important and influential type of advocate that can lead to referrals. They come in different shapes and sizes, and are seeking different experiences. It’s essential to segment them to align their interests with the right types of activities and rewards/recognition they desire.

You also need to understand other types of advocates, such as employees, partners, investors and influencers. These groups can contribute to your marketing and sales efforts by promoting your brand and content, referring new business and sharing their positive experiences with your business.

  1. Designing a referral marketing program that scales

Once it’s up and running, a successful referral marketing program will lead to dozens – possibly hundreds – of a referrals. As you build your own program, you should carefully consider how yours will be managed, and how you can make the process more scalable, predictable and efficient. These are just some of the reasons marketers have started moving away from managing their referral programs through email, spreadsheets or CRM applications in favour of all-in-one platforms built specifically to manage B2B referral marketing programs.

  1. Building engaging referral campaigns

Referral marketing campaigns are how you engage with past and current clients. Campaigns consist of an “ask” where you ask them to do something, such as writing a review or sending you potential leads for your product/service. Like any marketing campaign, the style, tone and creativity of these campaigns will greatly determine engagement and results.

The success of your referral marketing program may also depend on your ability to “nurture” your past and current clients. In other words, it’s probably not the best idea to jump right in with large asks that may turn off your past and current clients – start smaller, easier to complete asks and then build up to those larger campaigns.

  1. Measuring and optimizing your referral marketing program

Like most marketing programs, referrals should be measured. Focus on strategic metrics that relate to core business objectives, like customer referrals, references and reviews. Just as important are operational metrics, like engagement rate, and referral growth and churn. Finally, use this data to optimize your referrals and increase engagement efforts.

 

The 4 Pillars Of A Successful Referral Marketing Program

A well-designed referral marketing program is built around the needs of the client. Remember, you are developing a program that continually asks your customers and other constituents to take time out of their day to help you market and sell. That’s a big ask.

  1. The referral marketing plan

This is a strategic plan that specifies the program’s objectives, process, organization, technology and metrics. It’s a living document that can be updated as you learn more about who your clients and advocates are and what they want.

  1. The referral marketing process

The referral marketing process defines how you recruit, engage and recognize your clients. It also includes recommendations on how to plan and analyze these efforts. The steps can vary – what’s important is that there is a standard process so that the program can scale.

  1. Supporting technology

Technology can act as a “force multiplier” for the program. Some companies may use email, spreadsheets or a CRM application (or a combination of all three), but others will want a dedicated application or platform that allows a single marketer to organize, communicate with and mobilize past clients, current clients and advocates at scale.

  1. Referral marketing metrics

You should measure your program to determine its business impact. Use a combination of tactical metrics, like the number of clients/advocates currently engaged in the program, as well as strategic metrics that show how the program impacts your company, like revenue sourced and influenced by these referrals.

A summary for the rest of this Program includes:

  • 3 referral marketing worksheets (surveys) to help you determine internally what your referral process will look like.
  • The essentials of referral marketing
  • 6 common referral marketing applications
  • Customized 5 Step process to implementing an improved referral program
    • Step 1: Planning – It’s important to develop a strategic plan that specifies what the program objectives, process, people and technology are.
    • Step 2: Identifying and onboarding past clients, existing clients and advocates that support your business.
    • Step 3: How to engage past clients, existing clients and advocates that support your business. This includes 40+ referral & advocate marketing campaign ideas.
    • Step 4: Recognizing and rewarding referrals – A successful marketing program recognizes and rewards referrals or advocates that have done something positive towards your business. This includes 5 unique ways of recognizing and rewarding advocates as well as 20+ reward and recognition ideas.
    • Step 5: Analyze – This includes metrics and what we think you should measure and analyze to keep the program on track. It also includes a marketing metrics dashboard for you to keep track of your results, recruiting, lead generation and revenue. A referral marketing process map to track your progress through an easy to use chart where you can cross of objectives, activities and deliverables as you go.

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