Due to the nature of personal recommendations and element of trust, referral programs are effective for acquiring clients with a higher average lifetime value and who are more likely to remain loyal to your business. However, implementing and maintaining these programs have relied almost entirely on the expertise of the sales team. And, for many businesses, this is a resource commitment they can’t afford! As new tools for marketing automation emerge, such as Marketo, HubSpot and Pardot, it has become more feasible to establish an ongoing and where possible, automated client referral program. 

A Strategic Approach to Referral Programs

Understanding the strategy which informs successful referral programs is critical to creating your own. Firstly, analyse your database and establish who is in your network. Cast your net wide and reach out to contacts who are somehow professionally or personally connected to your primary customer base.

Identify the source(s) of referrals: Break down your contacts into categories, for example, current clients, previous clients, prospects, industry counterparts, and suppliers.

Identify your “evangelists”

After you’ve segmented your referral sources, identify the most valuable (i.e. those who don’t need an incentive to refer work to your business). These are not just clients or customers but also your vendors, suppliers or other industry partners that love your service and would offer their unwavering support.

Use different incentives based on segment

Will you offer incentives to your referral partners? If so, are they financial or non-financial? Interestingly, a recent University of Chicago study showed that cash incentives were close to 25% less effective regarding encouraging engagement with the referral program. Use this opportunity to work out which contacts will receive which offers.

Design and implement the program

Having segmented your contacts and decided on what incentives you will offer your partners, you should start collecting resources to create your program, for example: 

  • contacts’ emails;
  • step-by-step workflow that sends a notification to the sales team to get in touch;
  • landing page with a simple form to easily collect the details of referred clients; and
  • framework script that the sales team can use to pitch the referral program.

It’s also helpful to create a resources package for your contacts to distribute to interested friends. The pack can include information about the business such as testimonials, white papers and articles.

Make sure teams are on the same page

Detail the referral process in a central document which you circulate to both the marketing and sales team. It’s important that all teams know what material is sent to who and how frequently. The document should also set out which team member is responsible for contacting a lead and when.

Automate Wherever Possible

Automating the referral outreach program means your contacts move through the stages with minimal interference until a ‘trigger’ alerts sales or marketing to get in touch. Automation can occur through social channels, email or your website.

Social Media Automation

When you are looking to bring on board a new referral partner, providing them with value is the first step to building rapport. One way is to share a potential referral partner’s content through your social channels. Don’t forget to set up alerts so you are notified when a partner mentions your business. 

Email Automation

Ideally, you want to set up three workflows with your automation software to guide your contacts through the stages effortlessly.

  • Invite: this email announces the program and invites the contact to take part. The contact may respond ‘yes’ or ‘no’. Depending on how they interact with the invitation, the contact will either move to the second or third workflow.
  • Interested: the contact has indicated some interest in the program and has progressed to the second workflow. Here, they access information about the business, the program and its benefits.
  • Reminder: if there is no response (either they opened the email and never responded, or never opened it at all), the third workflow will send a reminder to the contact. This prompts the contact to respond either by showing interest and progressing to the second workflow or opting out altogether.

Website Automation

You can also boost engagement with your referral program by setting up your website to receive notifications when people visit certain pages or open an email. The data you collect about how contacts interact with your website and email can assist you in identifying responsive and active contacts.

Key Takeaways

  • Identify your business’ ‘evangelists’ as they are the most prolific source of referrals. 
  • Consider non-financial incentives for your referral partners.
  • Know what your ideal customer or client looks like from the outset.
  • Automate your referral program to generate leads with minimal time investment.
Adi Snir

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