What would it take to get your employees to sign up their friends down the pub?
One way to test whether referral will work for your business is to open a referral scheme up to your employees. Businesses regularly offer referral rewards for employees who bring in new employees but they should also consider offering rewards for employees who bring in new customers outside of working hours.
Some would argue that the employees should be so motivated and aligned with the businesses interest that this should happen anyway. In reality it happens very little. And the reasons why it happens very little are largely the same as to why customers don't refer more.
Designing a scheme that your employees will share requires exactly the same components that a referral scheme for your customers will need.
1. Belief in the product or service
If you're employees don't believe in your product or service then you've got bigger problems that you need to address. Setting up a referral scheme is a good way of testing their level of belief.
2. Two lines to convince a customer to buy
For this to work employees have to have the one or two lines that they could use to describe the business and what makes it most compelling to customers. This sounds obvious but in most businesses most employees do not have these one or two sound bites to hand. They could describe the business in five minutes and would probably touch on the most compelling messages but if you ask them for them explicitly for them they'll struggle to give them to you. Often employees are so focussed on their day to day role that they lose the big picture. Giving some sales messages to employees both helps them become advocates for your brand and makes them more motivated. A good example of this can be seen at HomeAway, an online marketplace for holiday rentals, where both Mention Me founders previously worked. The two most compelling arguments were how much revenue the average owner made from the site each year and how many holidays were arranged through the site each year. However before we started continually referring to those two pieces of data in team meetings very few people were aware of those statistics or would have thought to talk about them when describing the business. Doing so made them proud because it immediately showed the success of our proposition and the scale of the business.
3. The right incentives
Incentivising employees to sell feels slightly strange since you're paying them anyway but it does mean that they will be more likely to refer customers in their spare time. Your employees should be brand advocates. Yet selling your company to their friends can feel distasteful or even disingenuous. Enabling employees to offer a discount to friends means that it can feel like they're giving their friends something and completely changes the dynamic. It makes sharing a lot easier. Offering the employee a reward to share then makes them more likely to propactively promote the company. Finding the right rewards is again tricky but one of the easiest ways is to open up the customer referral campaign to the employees. There are a couple of things to be wary of if you do this. You should be careful about how you handle employees who have customer facing roles and it is sometimes easiest to exclude these roles from the referral opportunity. If you do open it up to everyone then the sales team should always earn more through their commission than the referral scheme and customer service staff should not be able to offer their referral codes to customers who are considering buying. Making this work is doable, it just needs to be thought through in advance.
All in all, employee referral schemes are a great opportunity to add a few more customers, to learn about how to make referral work (it's easier to ask your employees why they're not sharing than your customers) and to engage your whole team in thinking about what customers want and how to talk to them.