You wouldn't run the same ad indefinitely or share the same posts on social media every day, would you? That's because advertising and social media are responsive, so you're compelled to update them to adapt to customers' changing needs and preferences.
Your referral program should be responsive as well.
Your program introduces you to new customers, but you limit its effectiveness when you share a program that doesn't cater to changing customer expectations. Product discounts might attract new customers for a while, but what happens when your audience wants something else? If you don't consider their needs, advocates stop sharing and customer acquisition slows down.
Here are five ways to update your referral program so that it's always relevant and caters to customer needs.
1. Schedule referral program refreshes
When you create your referral program, you have a goal in mind. For example, your goal might be to convert 30% of referred customers every month. Reviewing your program regularly verifies whether or not this is happening.
The easiest way to do this is to establish a schedule that maps out when you'll review the program — a roadmap of sorts. This is what KOHO, a finance tech company, does. They use Trello to track updates and, because their board is public, their users can track progress as well:
How to get started
Set up annual or bi-annual check-ins to assess how your program is performing against your goals.
Use tools like Trello or Airtable to create projects and then create smaller tasks within them. Assign due dates in advance and think about what aspects of the program you'll review.
As in this example, you can organize your referral review tasks by status and priority so that it's easy to see what's due, what's on-going, and what's complete.
Examples of the types of tasks to add to your schedule:
- Run monthly analysis of referral and conversion rates.
- Review customer comments and feedback.
- Test user interface for bugs.
- Review Google Analytics for referral page stats, like traffic and click-through rates.
Organizing your roadmap by status and priority makes it easier to see every aspect of your program so it's clear what you're working on and referral program review is always top of mind.
Remember, your referral program doesn't have to change drastically after each review. Change the program enough so that it responds to customer concerns and so customer acquisition and conversion meet your goals.
2. Run reward burst campaigns
One reason brands don't update their referral programs is because it requires lots of effort to revamp the whole program. Perhaps the back-end code for the user interface is complicated or there's concern that one of the many integrations set up to manage CRM might break.
An alternative to a full-scale revamp is to promote time-sensitive offers — reward bursts or short-term increases in referral rewards — to quickly attract new customers in a short amount of time.
Do these as frequently as needed to build anticipation among advocates so they come to expect the occasional extra incentive. This tactic creates a sense of urgency and encourages advocates to take action now vs. waiting until later.
How to get started
When Intuit QuickBooks — an accounting software tool — saw an initial lift in acquisition after promoting their referral program to their high NPS customers, they went further and launched a burst campaign that targeted these advocates. The campaign ran for two weeks and offered advocates double the reward for each new referral.
Instead of the standard $50 reward, advocates now received $100 per referral:
By the end of the campaign, QuickBooks had tripled their revenue and increased the number of advocates by 6X. On top of this success, revenue and customer acquisition remained high for weeks afterward — even after the reward went back down to $50.
Jenny Clauson, former Customer Marketer for QuickBooks Online, explained the experience this way, “We were very excited that rates for advocacy, sharing, and conversion all stayed higher than normal after we ended the campaign.” She continues, “Bursts are a great way to drum up excitement about our program throughout the year. Thankfully, it was really simple to execute, and based on these great results, I’m looking forward to running more!”
To get attention for your campaign, run promo ads or start an email campaign to target your super advocates, and create new landing pages that highlight the new incentives.
3. A/B test every part of the referral program
A/B testing shouldn't be limited to the early days of your program when you're preparing to launch. It should be an on-going practice to ensure your program meets the needs of your customers and their referrals.
Be strategic and test every part of the program in sequence. This is a little like “rotating A/B testing” where you test the copy during one cycle, test the creative in another, and then test the rewards.
Use the data you collect to update your program. The more often you test, the less drastic the updates will be. They're more likely to be minor tweaks that show your audience that you're always working to improve their experience.
How to get started
Our platform lets you run multiple referral campaigns at once so you can test different aspects of the program.
To start, segment your advocates based on factors like how often they share referrals, how long they've been a customer, or their NPS score.
This way, your tests target the right users — the ones most likely to use your referral program — so that your results are more accurate. Test specific features and analyze how different segments react to changes. You can also track which types of incentives have the most shares and conversions.
This is an example of one of the reports available on our platform. This particular one looks at how promotions performed over time. You can see how many advocates were targeted, how many clicked a link, how many shared the program and more.
After you've run your tests and analyzed the data, take your findings and incorporate them into your existing program. Now you can give advocates a better user experience, get referred customers interested your brand, and meet your program goals.
4. Incorporate social media
It's not enough to wait for customers to visit your site and read about the program or wait for them to proactively access the program from their user dashboard. Take the initiative and take the program to your audience instead.
With this approach, you're not updating your program but rather changing how customers find and hear about it.
Keep in mind that you don't have to promote your referral program on all social networks. For the most impact, use the social media networks your customers spend the most time on.
How to get started
As you understand your audience more, you're able to tailor your social media posts to cater to what's most important to them. For example, use images that resonate with them, use copy that mirrors how they speak, and more.
Here are some examples of companies that do this well.
This post from Hanna Andersson focuses on the benefits of sharing and on the fact that most people like to get something in return for spreading the word. The image used suggests how great advocates will feel after taking part.
Use the social benefits of sharing to encourage advocates to participate. People want to be seen as having good taste, so like this post from Vera Bradley that caters to millennial women, encourage advocates to share because their network of friends will appreciate it:
Partner with an influencer to extend your program's reach. In this example, the influencer is a cosmetics brand, which improves the chances of more people within Ulta Beauty's target market seeing the program:
Review your referral program regularly
It's easy to think that when you launch a referral program, that's it. You've developed it and set it up so the assumption is to let it run because it'll meet customer needs and help you grow your customer base.
But the truth is, just like other marketing strategies, your referral program needs an occasional update.
Instead of only making changes in response to customer behaviors, be proactive and regularly audit and refresh the program.