6 Ways to Increase Your Referral ROI For Less

6 Ways to Increase Your Referral ROI For Less

6 Ways to Increase Your Referral ROI For Less

Struggling with low referral response rates? These six strategies will increase your referral program’s ROI without requiring a huge upfront investment.

1.Produce a Low-Budget Viral Video

Sound like an oxymoron? It’s not.  Shopify marketing expert Richard Lazazzara cites Dollar Shave Club, one of the forerunners of the direct-to-consumer shaving revolution, as a prime example of the referral-driving power of viral video marketing.

According to Lazazzara, Dollar Shave Club’s video wasn’t a traditional marketing video. It wasn’t designed to produce leads directly. Rather, it was built to generate buzz among Dollar Shave Club’s target demographic: younger men who hate shopping for shaving equipment in person. And it worked. Within a week, more than 25,000 people had signed up for Dollar Shave Club on the video’s strength.

2. Understand Your Referral Window

As a general rule, your customers are more likely to refer their friends and colleagues in the early stages of their relationship, before they settle into a routine and grow accustomed to using your product or solution. (This is one reason why it’s important to keep your customers engaged, on their toes — more on that later.)

One easy way to capitalize on early-relationship enthusiasm is to offer a referral bonus at sign-up or the point of purchase.

“Encouraging new customers to refer friends or colleagues right away will definitely boost your referral program’s ROI versus a later ask,” says Vivek Rajkumar, an entrepreneur and investor who specializes in business development for early-stage companies.

Building a bonus into that early ask — for instance, one month free for every successful referral — will further increase response rates.

3. Make the Ask

You won’t get it if you don’t ask. If you want customers to refer their friends and colleagues, you need to make it clear to them that that’s what you want them to do. Don’t be afraid to use semi-aggressive tactics, like popup windows or landing pages at the point of sale, to make your intentions clear.

4. Ask Again, and Again

See your referral marketing efforts for what they are: another tool in your lead generation arsenal. Just as you work to cultivate leads from a variety of sources and work to drive repeat sales from past customers, you can use email marketing and other modes of contact to encourage customers to refer others. In effect, you’re harnessing those customers as extensions of your marketing and sales teams.

5. Use Social Media to Target Your Highest-Value Referrers

Target the referrers — customers — most likely to come through by analyzing your customers’ social media spheres for clues about their personal and professional networks. The denser their networks are with prospective buyers who fall into your ideal prospect personas, the likelier they’ll be to make successful referrals — and more of them.

6. Go Outside the Referral Workflow

It’s tempting to run everything through your marketing suite, where it’s easy to analyze and extrapolate from. But this by-the-books strategy might leave money on the table. When warranted, lean on informal relationships and old-fashioned business development strategies — like, you know, face-to-face conversations — to plant the seed.

Get Your Name Out for Less

Executed properly, referral marketing is among the most cost-effective lead generation tools around. But you have to keep at it — and keep innovating. You can be sure that your competitors already are.

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