Formalizing and optimizing a referral program to boost ROI.By: Ricardo Ibarra
While there are several sources pointing to referrals being one of the highest quality lead sources [What percentage of your revenue comes from referrals?], sales and marketing executives across the board admit to not having a formal referral program in place.
In fact, Business2Community’s study shows referrals as the highest acquisition channel for conversion rate (almost 4x the average), encouraging businesses to consistently ask customers to tell the world about their product (maybe even reward them) to capitalize on this channel and drive profit.
The best tactic to optimizing your sales and marketing strategy is to look for the sources of highest conversion and continue to improve those programs. So why would referrals be any different? One base reason is that a formal program is not in place to reference and improve.
To formalize a referral program and drive maximum revenue:
- Outline your goals and how the referral program should be run. Much like any other sales or marketing tactic, goals and logistics around how your program should run need to be mapped out. Your plan should include detail around how / when the program is implemented, key owners and responsibilities, how leads are managed, incentive opportunities to drive results, and of course, your lead generation and revenue goals.
- Incorporate various incentives to keep referrers motivated. People are all motivated by different things and choosing various incentives that can easily be rotated into referral programs will give you the best results. Incentive programs can include cash, prizes (iPad, etc.), experiences (tickets to a show or sporting event, a trip, etc.), and also public recognition. If you run referral programs with different incentives you can track overtime which is most effective for your network of referrers.
- Measure results. Like any other sales and marketing program, before you launch the program it’s critical to outline key goals and metrics to track along the way, and critical milestones to review the results and make any necessary adjustments. Upfront, outline what your key performance indicators will be (KPIs), and also how they will be tracked. It is ideal if you can automate the tracking and access a dashboard of results for easy reference and for sharing with your team and necessary executives.
- Optimize the program(s). After you measure results for a specified period of time you should be able to see trends – what’s working? what’s not working? where are the most referrals coming from, and why? That data should be used in optimizing your program moving forward to continue to make your processes more efficient and drive up your ROI.
The Auctio platform is built with these core components in place for referral programs. To learn more about how to use Auctio to facilitate the planning, execution, and optimization of your referral programs contact us for a demo.