When referral programs first launch, there's often a lot of hype and excitement surrounding them. But the truth is: some referral programs stop being as effective over time. This happens for a couple of reason, namely:
- The program no longer meets the needs of advocates
- The program doesn't feel personal enough
- There are too many steps in the referral process
- New advocates don't know about the program
- It isn't easy for advocates to track their progress
An ineffective referral program means your customer acquisition efforts take a hit. The lifetime value (LTV) for referred customers is 16% higher than non-referred customers, and referred customers have a 37% higher retention rate. This means an ineffective referral program can represent a major loss to your ability to pick up and maintain new customers in an affordable manner.
To pinpoint the reasons why your program isn't performing, start by asking your customers — instead of assuming you know the answer.
Asking ensures that you're fixing the right problems and also shows that you value customer insights.
We've put together a three-step process to help you create a process that does two things: 1) gets customers engaged and 2) gets you the information you need to improve your program. Let's take a look.
1. Ask the right questions to get the right answers
The first step in any customer feedback campaign is to set a clear objective. This makes sure that instead of asking for general referral program feedback, you approach feedback more strategically.
For example, do you want to know if customers understand your program? Do you want to know how customers feel about the referral process? With a specific objective, it's easier to think of questions to ask to get the information you need.
Remember, the goal here is to find out why advocates aren't sharing your referral program so start by looking at the program in parts.
Let's say your objective is to better understand how advocates use the referral program. You can ask questions like:
- What do you like most about our referral program process?
- What part of the referral process doesn't work well?
- What features would you like to see added to the referral process?
This way, the data you collect gives you insight into specific pain points in the referral process. For example, you might find that advocates want more social media sharing options or they want to be able to write their own personalized message to referred customers. Asking general questions like “What's the best part of the referral program?” won't get you this information.
To decide which questions to ask customers, first ask yourself if each question will help you meet your objective. If the answer is yes, then use it. If not, remove it from the list.
Also, consider the types of questions you'll ask. You can ask categorical questions with multiple choice options, ordinal questions that ask customers to rank their preferences, or ratio questions that are open-ended and let customers give as much feedback as they like.
2. Pick relevant distribution channels
The next step in improving your referral program is figuring out how you're going to ask your questions. This depends on where your advocates spend the most time online and the types of questions you plan to ask. For example, open-ended questions are best shared via email than on social media where people are easily distracted.
Let's look at examples of the best places to ask different types of questions.
Send surveys via text
There was a time when sending emails was the best way to get hold of customers. Now, inboxes are full of personal messages mixed in with marketing and promotional emails from brands. There's no doubt that people get value from some of the emails they receive but inboxes have gotten noisier and there's a lot of information in there competing for your customers' attention. By 2021, there are expected to be almost 320 billion emails sent daily!
Another approach is to use a tool like VoiceSage to send surveys via text:
[Source]
You can send short survey questions and ratio questions with a text box for an open response. The benefit to this approach is the improved customer experience. Customers don't have to leave the message to complete the survey, which ensures they'll complete it sooner instead of putting it off for another time.
The main benefit of sending surveys via text is the open rate — open rate for text messages is 98% compared to 20% for emails. Plus, faster response time means that you don't have to wait days or weeks to get a response from your customers. The response rate with text messages is 45% compared to 6% with email.
Simply create a campaign, enter the questions you want to ask, and then send the campaign.
[Source]
Post polls on social media
If the best way to interact with your customers is through social media, choose the platforms with the most engagement and post polls there. For example, post a poll on your Facebook business page or use your Instagram Stories.
Facebook poll:
Instagram polls:
[Source]
The great thing about polls on Facebook is you can give your audience the option to add in their own responses if they don't see a suitable response on the list. Your questions are a starting point, but people can also give you answers that you didn't consider.
Polls are a great option on social media because they're short, so they improve your chances of a higher response rate. Post different polls over the course of a week to avoid overwhelming people with lots of questions at once. Have four or five questions that will give you as much information as possible.
As a bonus, another way to use social media is to run A/B tests and use the results to gauge customer interest. For example, let's say you launch a new product or a new feature within an existing product. Publish two versions of the same post where each one focuses on the solution for a different pain point. Use whichever post has the most engagement, in terms of likes, comments, and shares, as a starting point to develop a larger, more targeted campaign.
Referral Marketing – The Best Practices You Need to Know
Written by veteran referral marketers, this guide will help you optimize your referral marketing program and supercharge growth.
Install a feedback widget on your website
If you have solid, consistent traffic to your website, then consider embedding a feedback widget. This allows you to quickly collect customer feedback in a place they're already spending time.
Use a tool like SurveyGizmo that lets you create surveys and embed them on your site so that customers don't have to leave and interrupt their experience.
If a customer has to leave your site to complete a task that doesn't immediately benefit them, they're less likely to interrupt what they're doing to complete a survey. A better approach is to make the experience as simple as possible to encourage them to participate.
[Source] Survey embed code
[Source] Survey sample
Use a tool like Google Analytics to see where people spend the most time on your website. Based on the results, embed your survey on the pages with the most traffic. For example, put the survey on your shop or product pages and your referral details page.
3. Strategically test your customer feedback
The final step in the process is to create a way to test and incorporate feedback into your referral program. Examples of what this might look like are:
- Segment and rank results
- Determine feedback scope
- Create and run tests
- Incorporate changes
Let's take a closer look at each one of these steps.
Segment and rank results
Once you've collected feedback, segment and rank the results. Here's an example that summarizes the data in a table:
[Source]
The first segment can represent all of the data you've collected and the following segments represent each area of focus within your referral program. So your table headers might be:
- Segment 1 = Overall referral program
- Segment 2 = Referral program personalization
- Segment 3 = Referral program process, and so on
Like the template above shows, you can color code responses so that it's easier to see what type of feedback ranks high across all segments. What two or three pain points are your advocates experiencing? Are the results in line with what you expected or are there surprising findings?
Determine feedback scope
Take the results and figure out the scope of each opportunity you've identified. Decide which updates qualify as short-term and long-term fixes. For example, if customers want you to get rid of your current points system in favor of money, the planning and logistics of this might make this a long-term update.
Create a roadmap that lists the most important changes you're going to make and add due dates to each one. This approach will help you plan and track improvements to your referral program.
Create and run tests
Next, create test versions of the updated program and run tests within your advocate group to see if there's an increase in usage. Testing is vital before launching the updated program because this gives you a chance to get even more feedback and confirm that advocates are receptive to the change.
Let's look at three test scenarios:
- Test scenario #1: If survey results show that customers aren't aware of the referral program, create an email drip campaign that introduces the referral program immediately after new customers buy something. Then send a reminder a few days later if they haven't taken action.
- Test scenario #2: If survey results show that customers can't easily track their referral progress, create and share a demo customer dashboard that shows advocates who they've referred, who has purchased, and the advocates' total rewards to date.
- Test scenario #3: If survey results show that customers don't feel the program is personal enough, customize the referral screen to display advocate names. You can go one step further when this update is launched and send reminder emails that show customers' recent purchases.
Based on the response rates for each of these tests, make full-scale updates and prepare to launch the updated program to all advocates.
Incorporate changes
The last step in the process is to implement the changes you've tested.
Keep in mind that you can make multiple changes to your referral program in the short-term to improve the overall program. You don't have to launch changes one at a time.
Continue to test which updates result in the most conversions and concentrate on these. For example, focus on continuing to improve the intro email drip campaign to keep the updated program top of mind.
Making your referral program more effective
There you have it, a process to figure out what needs to change within your referral program and an action plan to get it done.
Other than you, your customers know your product really well. So be sure to acknowledge all of the customers who took the time to give you feedback. Let them know that their feedback is being used to make your program better and that you value your partnership.
The more you acknowledge how much you value customer feedback, the more willing they'll be to share insights with you in the future.
