Marketing funnel strategies like referral-based marketing are some of the savviest things a company can do for scale. Why? Here’s why — it enables word of mouth, which is generally more powerful and persuasive than basic advertising. Referral marketing is one of the oldest forms of marketing, and studies have found that 92 percent of people trust referrals from people they know, making it one of the best ways to get leads and new customers.
But you can grab referrals by the horns, it’s not enough to let happy customers play telephone for you. What you do need is a good referral marketing funnel in place. This guide is going to cover the fundamental steps for creating a referral marketing funnel that is not only going to bring you new customers but also help you keep those you currently have engaged and loyal.
Step 1: Setting Clear Goals
Before diving in too deep into the mechanics of a refer-a-friend marketing funnel, take a moment to step back and back what you want. Defining the objectives of your referral program will be your roadmap throughout the entire process.
So, what should your goals look like?
You want goals that are specific, measurable, achievable, relevant and time-bound (SMART). Rather than defining a goal that is vague such as “increase my referrals,” define it as something measurable, “30% increase in my customer referrals over the next 3 months.”
Referral marketing goals are typically:
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Getting an exact number of new customers.
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Raising the lifetime value of a customer (CLV).
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Enhance brand identity and visibility.
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Lowering the cost to acquire new customers (CAC).
Clear goals will not only allow you to measure progress, but also keep you honest and focused on a program that works.
Step 2: Who Are Your Advocates?
There is one primary growth engine for referral programs: your existing customers. That is, your true fans who are so enamored with your product or service that they want to let others know about it. But how do you tell those advocates?
Spot your biggest fans using data
Take a deep-dive into your customer base for loyalty signs. Indicators such as repeat purchases, a high Net Promoter Score (NPS), or regular engagement with your brand can identify someone who is likely to refer someone else to you.
Ask yourself:
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Who are my happiest customers?
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Who refers the good patients or has good testi-m o ni a l s – e a r i n g clients?
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Who follows our brand on social or in email campaigns?
You all are one of the first people that should be advocates for your business, because you are the most passionate about it: the fact that customers want to refer your service elsewhere is a sign that you’ve done a great job for them.
Option 3: Make The Bait Alluring
People love to win and they love to be rewarded, so any good referral marketing funnel will have easy-to-understand incentives that make people excited to work with you. The concept is to provide a win-win situation for both the referrer (the person telling people about you) and the referee (your friend or colleague).
What kind of referral incentives to offer:
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Cash rewards: Money off a purchase, cash bonuses or store credit. For instance, provide $10 off to the referrer and referee.
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Exclusive benefits: VIP memberships, free upgrades, or exclusive products or services.
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Experiences: Such as complimentary passes to an event, a personal consultation or some bespoke gifts that represent your brand values.
Reward simply, and be consistent with it.
The best refer-a-friend programs articulate what exactly the rewards are in clear and simple terms. People should know precisely what they will receive and when. For example: “Refer a friend, and you’re each rewarded with $20 credit when they make their first purchase” is concrete and actionable, and easy to understand.
Step 4: Implementing Tracking
Step 4: Monitor the Performance of Your Referral Program After you have established your referral program, you need to monitor its performance. By following the funnel closely, you can figure out what tactics are working and adjust strategies accordingly.
Leverage digital tools
3-Implement referral tracking software It’s best to automate the process via software specifically built for tracking referrals. Applications like ReferralCandy, Post Affiliate Pro, and Referral Factory can allocate another unique code or link to each advocate, making it simple to track and attribute referrals.
What should you monitor?
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Referral Source: Where did the referral come from?
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CONVERSION RATIO: How many of the referrals actually took action and became paying customers?
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ROI: Higher rewards for the investment.
From monitoring and reporting on these metrics, you will be able to determine how your program is performing and where to make adjustments.
Step 5: Promotion
You’ve got yourself a killer referral program, but no one’s going to join it if they don’t know it exists. The next challenge is getting the word out to your customers.
Announce your program widely
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Email: Email campaigns Target market your already existing customers with the benefits of easy referral.
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Social media updates: Let everyone know via beautiful images and a kick-ass caption on Instagram, Twitter, LinkedIn and Facebook.
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Website banners: Embed attention-grabbing banners on your website that will take visitors to your referral sign-up page.
Strengthen the call-to-action
Use power-packed language in your promotions. For example:
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“Refer a Friend and Get Rewarded!”
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“Love our service? Share it and get special benefits!”
Take advantage of onboarding
If you are bringing on new customers, make sure to bring in your referral program as early as possible in the onboarding process. And pair it with welcome emails so that customers have the opportunity to engage from day one.
Create Your Funnel, Create Your Growth
A referral marketing funnel leverages the magic of satisfied customers to spur sustainable growth. With specific goals in place, heroes to rally around, and offers too good to pass up, you can build a cycle that constantly brings more customers in the front door while retaining the ones you already have.
Be sure to measure and promote your program to keep participation high. A properly constructed funnel doesn’t just attract new business; it transforms your clients into ambassadors for your brand.
Are you ready to turbocharge your referral program? Start trying out these tactics today, and see your business boom with happy customers who bring in more happy customers. It’s simple, sustainable growth that’s also cost effective.
The Secret Weapon for Growth: Why Referral Marketing is a Must-Have Strategy
