There’s a certain excitement when you launch your first referral program. You have learned that it can help you boost your business, and you are excited to see how it works for you. So you power your Squarespace referral for example and launch your referral program in a few clicks.
You have high expectations. You expect your customers to respond with enthusiasm and start sharing your products and services with other people, and you are expecting sales to pour on your launch day.
The only problem with this scenario is that it did not come true. When you launch your referral program, no one signs up. No one knows it exists, and no one cares. You hear crickets. So you wrack your brain, wondering why it did not work and where to market your affiliate program. This is a problem with new websites like Best Drums Set Labs, that offer the best drum sets for teenagers. But there’s a solution.
Well, it is not because there is something wrong with your referral system. You just need to understand that getting referral responses is all based on human psychology. You have to master these if you want to get more sales in your business. In this article, you’ll learn some tweaks on how you can fully optimize your referral system so that it is designed to attract more sales.
1. The Psychology Behind Referral Programs
Before we dive into the actual optimization tactics to improve your referral system, let us first take a look at the psychology behind referral programs. Surely, there is a reason it is considered one of the most effective marketing methods for modern businesses. And it starts with its relation to human psychology.
2. It Works with Behavioral Psychology
According to Jonah Berger, the author of “Contagious: Why Things Catch On,” there are six reasons people share information. These are:
- Social currency: These are things that make you look good in the eyes of other people. This is the reason why brands like Louis Vuitton and Chanel are able to make money. There is a social status associated with their products.
- Triggers: This is based on simplicity. The simpler or easier an idea can be remembered, the easier it will spread. Brands have spent millions of dollars on advertising just to communicate their ideas with their audience.
- Emotion: Wonder how some emotional videos on Youtube goes viral? That’s simple. Anything that tugs on the heart will get shared.
- Public: This is all based on the idea of herd mentality. As more people buy something, more people will follow suit.
- Practical: Humans love information or products that they can easily access and use.
- Stories: Stories can get remembered more easily than boring information. Brands do it all the time, and it works.
Referral marketing can work with all six factors. But the most relevant is the public and social currency triggers. It works by promoting products and services that have already been used by the referrer. While you can also insert stories, emotions, and other factors, all of these are optional.
3. Increased Social Proof Improves Customer Trust
While you can claim that you are different from the crowd and have your way of determining what is right for you, you may notice that you tend to check reviews when you buy something online. This behavior is based on the human need for social confirmation before they do something. So if someone shows you that they have done something, you are far more likely to do that action.
Social proof can significantly be improved with referral marketing. As you ask your customers and website visitors to share your products, more people will start talking about your brand. It encourages potential customers to jump at the chance to buy your products because they see that others are doing the same.
If your potential customers think that other people like you and buy from you, they will also do it. Trust need not be created. Your potential customers will immediately trust you as a result of the recommendation of other people.
4. The Number of Referrals You Attract are based on Referrer Authority
If you want to get more referrals to your business, you have to enlist people who are known, loved, and trusted in your niche. These are the influencers – the people who are respected and followed because of their content and inspiration.
You can liken this to how you react to an official in uniform. They may say the same information, but you will most likely believe the person in a suit more. Why is that? Well, it is based on human psychology to respect hierarchy. People tend to think of people who have authority.
You can quickly adapt this into your referral program if you work with an influencer. This is as simple as getting a celebrity to promote your referral program. And you will immediately get signups. But you don’t have to limit yourself to stars. Some micro-influencers can help you. These are people who have less than 5000 followers in their accounts, but they have a massive influence on their niche.
You can also enlist your best customers to do the work for you. These are the people who love your products and love working with you. You can ask them to invite other people to visit your business. If you do it this way, it’s easy. You don’t have to convince them. They will do it because they already like you.
Even your best customers have authority over their social circles. If you get them to promote your products to their family and friends, it will have a better impact. This is because they know, like and trust the person to respond to the promotion quickly.
5. Referral Programs Offer a Win-Win Situation
There is a reason why you cannot convince a stranger to do you a favor. You have nothing to offer them, and you want them to do something for you. This is sleazy; it also makes the stranger feel that you don’t even care about them. All you care about is what they can do for you.
Referral marketing works because you offer something in return for the promotion. You are not merely asking your customers to promote you. You are giving them an incentive to help you.
Referral marketing works better if you offer double-sided incentives. Every referral program has a different approach to rewards. Some plans only pay the referrer while others focus on the friend. The best approach is to reward both, for it helps both. As you help more people, you also generate better results for your business.
6. Strategies to Optimize Your Referral Program for More Sales
You can only optimize your referral program if you understand basic human psychology. In this section, you will be taking everything you have learned in the first part to make minor tweaks in your referral system.
Here are some strategies to optimize your referral program for more sales.
7. Examine Your Rewards
The first thing that you must take a look at to know if your program is worth your prospect’s time is your rewards. Your market is primarily motivated by these prizes, so it is imperative to choose the right one. There are different types of bonuses. There are cash, cash discounts, percentage discounts, free items, item demos, and others. It is essential to choose the one that will get the most response from your target market.
How will you know the best one? That’s simple. You ask your audience. You can talk to 10 people in your audience and ask them about the incentive that they like to get from you. This will give you some ideas on the best rewards to include in your referral program.
8. Make the Process Easy
If you want more people to promote your business, you have to make it easy. You can do this by having straightforward mechanics. Clearly state how your prospects can qualify for your incentives. Does it involve a social media share? Say that. Do they need to give the contact information of their family and friends? Then state that. Make your referral program easy to join.
9. Consider Having Double-Sided Incentives
I have discovered that there is one deal killer in most referral programs. This is because the reward is only given to either the referrer or the friend. When this happens, the other party is a bit hesitant to take action. You don’t want that. You want to encourage them to promote your program and take the necessary action. And you can do that easily with double-sided incentives.
10. Remove Pushy Language
Invitations to your referral system should be done naturally. Your prospects should not feel as if they are being used. You are only inviting them to join. If they joined, then that’s good. If not, that’s okay. The best thing about this is that you are also not appearing desperate. This attracts more clients than you can imagine.
11. Create a Quiz
It pays to be patient, especially in your business. If you are patient to show your prospects that you care, they will shower you with support through their engagements and money. It is essential to qualify candidates to see if they are a fit for your business.
You have to do this before you show them your referral system, or you will just be talking to a brick wall. A quiz is a perfect tool to help you qualify leads. This will help you filter through your leads so that you can find the potential clients that are more likely to convert
12. Have Analytics in Place
You can only measure your results from your referral program if you have analytics in place. This is why it is so effective in lowering or stopping shopping cart abandonment and boosting traffic and sales. It is because you can see how it is performing and tweak your campaign based on it.
If you have not implemented analytics, now is the time to do so. This will help you see how many people have signed up, how much traffic you got, how many sales were made, and how many people talked to you.
13. It Never Hurts to Ask
Who are the best people to evaluate your program? That would be your referrers and referrals. After all, they are the people who have direct interaction with your program. They are the best people to ask if your incentives are working, and they like your program the way that it is. They are also the best go-to people for suggestions.
14. Ask Your Customers at the Right Time
It is not enough that you know how to ask your clients. You also need to ask them at the right time. When is the right time? It is right when your client has checked out from your page. This is the perfect time because your client has just recently completed a transaction with you.
Because of this, you don’t have to convince them to go another mile only to promote you. You can make it simple and say ‘Hey, thanks for buying. If you want to get a discount code on your next purchase, just promote our products to your family and friends’. It is easy and straightforward, but it works.
Those are the simple tweaks that you can quickly implement to improve your referral program. It is effortless. You don’t have to overcomplicate it. You need to take a careful look at your program and tweak it according to your customer’s feedback.
There is simply no better approach to optimizing your referral campaign than to ask your customers for they know what they want and what they expect from you. By doing this, you can eventually boost your sales for more people who will be attracted to join your referral program.
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