A lot of thinking goes into building a referral program current customers want to jump at. You have to decide whether you're going to offer a discount or some other type of special offer. The point is to create something customers appreciate and their referred friends are curious about.
But here's the thing. With all the effort you put into finding new customers, how much time do you spend onboarding them and acquainting them with your product? All too often all the attention is put on acquisition and not enough on onboarding.
This means that all of the time you spent creating the program goes to waste. Just as quickly as newly referred users sign up, they churn and don't come back.
What you need is a well-thought-out onboarding process for referred users that focuses on two things: social proof and value. Use these two variables to create an onboarding process for referred users so you keep them around for a long time.
Referred users are an easy win so keep them happy
The great thing about referral marketing is that with a little hard work to satisfy your current customer base, they do most of the customer acquisition work for you. After all, 83% of satisfied customers say they'd refer a friend. Even though only 29% follow-through it means that the referred users that you do get are primed for conversion — they're four times more likely to buy something.
Plus, of your newly referred customers, 92% say that they trust the recommendations that come from friends. So you end up with lower churn and more profitability in the long run:
Even with these “easy wins,” keep in mind that a simple “welcome aboard” doesn't automatically unlock the benefits referrals offer. Instead, your onboarding process has to focus on converting and retaining these new customers.
If we use a simplified equation where a successful referral onboarding process = social proof + value, then referred users see that not only are their friends using your product but you've immediately solved a problem and proven why you're the best option for them.
Remember, you come recommended by someone that referred users know and trust so they have more expectations than non-referred customers. They've heard firsthand about what you offer and how you're better than other options in your niche, so use your onboarding process to keep newly referred users engaged. This way you don't lose hot leads and miss out on the long-term revenue boost they offer.
Let's take a closer look at each one of these variables to see how they work.
Use social proof to encourage referred users
When someone tries a product for the first time, there's some apprehension because they don't know if the product will meet their needs. To convince new leads that they've made the right decision, social proof comes into play. It's an endorsement — whether direct or implied — from a trusted source that influences someone's decision to buy.
There are a few different ways to approach social proof. You can use:
- Customer testimonials
- Expert and user reviews
- Influencer coverage
- Number of social media followers
- And many others
Another option is to get your advocates involved. It might be tempting to think that once your advocates refer someone their job is done. But the truth is that your advocates can play a big part in the onboarding process by offering social proof to remind referred users of who referred them.
Let's look at an example of how this works.
Houseparty is a video chat app designed to help users connect more frequently with friends. As soon as new users sign up, they're asked to check if any of their friends also use the app.
This option to find friends during onboarding also works for referral onboarding because it reinforces the decision referred users made to use the app. They've heard from their friends who use the app but now they have visual confirmation and can connect with these friends in the app.
On top of that, referred users also get to see which of their other friends use the app. So not only are specific people saying this app is great, but other friends also use it.
Another hidden benefit of using social proof this way is that after the initial signup, it's clear to new users what to do next. Instead of spending time trying to figure out how to set up the app, referred users are shown how to add contacts — or any other type of content — early in the onboarding process.
Add to all of this the fact that referred friends are eager to use their discount or special offer as part of the referral offer. So the easier you make onboarding for them to get started using your product, the better. The discount or special offer gets their attention and the social proof helps to close the deal.
Rehash value to improve retention
The next variable in the successful onboarding equation is value. Depending on your product, get users to use key features during onboarding so they experience value early on. For example, instead of saying that it's easy to upload content, get new users to upload their first bit of content during onboarding.
Showing users this value early on is important because “80% of new users stop using the average application just three days after using it for the first time. If you don’t demonstrate your application's value to your users early, and turn them into habitual users, your application will die.”
Remember, referred users are warm to hot leads so the goal here should be to make them as comfortable with the product early on to increase retention.
Once new users set up their profile on Wix, they're sent a series of emails with tips on how to start using the platform and get the most out of it. One example is this email outlining the six recommended apps for when you're building a website:
Let's assume Wix has done their research and found that users who installed these six apps were the most happy with their final result.
The email is broken into two parts to highlight essential apps (comments, testimonials, and Instagram feed) and promotion apps (traffic generator, site booster, and visitor analytics). The idea here is to show new users the apps most likely to help them experience Wix's promise to help users build stunning websites.
When users install these apps and experience their Aha! moment — the moment when they experience the value Wix promised for the first time, like a spike in traffic — they're more likely to be retained longer than if they didn't experience it.
A few ways to incorporate Aha! moments into onboarding include:
- If your product connects people, then automatically add contacts in the app.
- If your product collects data for users, get new users to pick the top five topics they're interested in.
- If you have a project management app, get new users to upload their first task.
- If you have a marketing app, get new users to create their first campaign.
Choose one key action that you've found delivers value and make it a part of onboarding.
Create a unique onboarding process
Get creative with your onboarding. You have to include standard steps like getting new customer information and helping them set up their profile but, beyond that, be flexible.
Referred users are new so you don't know much about them. Chances are they're very similar to your advocates so use what you know about your advocates to figure out what type of social proof to use and which value to incorporate.
If you have a large or complex product, consider customizing onboarding depending on what you learn from current customers. For example, do some prefer influencer reviews or do they look to social media following to decide whether to buy. Don't make it complex, but create processes that are unique to each group to increase retention.
From there you're well on your way to creating a high-converting onboarding process.