Every business will have slightly different marketing objectives, depending on its audience, industry and size. But there are some core objectives which most marketing teams share.
We take a look at 6 key objectives and how a referral scheme can help you achieve them.
1. Customer Acquisition
New customer acquisition is the lifeblood of any company. And your existing customers could be your biggest sales asset.
Here at Mention Me, where we have worked with 200+ clients on their referral schemes, they have typically seen an uplift of between 10-30% in new customer acquisition. Which means referrals have become a significant new marketing channel for them.
This doesn’t happen overnight. AB testing is crucial for finding the right offers, creatives and sharing options that work for the brand. See our guide to AB testing for ideas to steal and expect new customer numbers to keep growing 6, 9 and 12 months after launch.
2. Database Building
Email is still one of the top 3 sales drivers for digital marketing. Which Marketeer doesn’t dream of have a large database of opted-in customer emails? Not always that easy to achieve unless you have something meaningful to offer them in return for their data.
Typically only 1-5% of website customers opt in to receive emails. Customers acquired via referrals however are 10x more likely to opt in. Yes, our clients are seeing a 50% opt-in rate!
This is true even of those who haven’t yet made a purchase.
The simple reason? They trust and value the recommendation of their friend, and this creates a halo-effect around your marketing opt-in. The thinking goes something like this: “My friend really likes this brand and she has great style, so yes, I think I might like their newsletters”. .
3. Repeat Purchase
What’s your repeat purchase rate? This will obviously be determined by the industry you are in - the repeat purchase rate for a car is going to be much lower than for fast fashion. But that doesn't mean that you can’t influence that behaviour. Keeping “front of mind” is key to purchase consideration even in industries with infrequent purchases.
Across a number of retail clients, we have found that customers who have received a referrer reward are 54% more likely to buy again than someone who hasn't become a referrer.
How can you identify your brand advocates? Patricio Robles of eConsultancy recently highlighted a number of ways of identifying brand champions. As well as monitoring social media posts, referral programmes are an ideal way to identify those customers who are loyal to your brand. Our recent post on social capital shows why customers are unlikely to refer a product that they don’t truly value and how you can capitalise on this loyalty.
You’ve obviously implemented a win-back cycle...right?
If not, then your competitors could be reaping the benefit.
Just because a customer is giving you the cold shoulder, that's no reason to walk away from the relationship!
First things first, you need to segment your lapsers to identify those that you can re-engage. You can do little to win back a customer who is no longer in the market for your product (pregnancy sector for example), but there are many who might be open to some wooing:
Lack of communication, misconception about product or pricing changes, new competitor in the market…..
A referral scheme is a compelling reason to re-engage with these customers. It gives them a reason to give you another try. And if you successfully get them back on board a second time, they may turn out to be your best brand ambassador.
6. Increase customer value
Referred customers can be amongst your most profitable. We have found that not only are they more likely to go on to refer others - 3x more in fact; their first order value is also 10-25% higher than the average. They also have double the average Life Time Value.
This could be the year to smash those marketing objectives
If you have yet to implement a refer-a-friend program then there really is scope to accelerate your sales growth, build loyalty and increase customer value.
Our free step by step guide on how to launch a successful referral scheme can help you get started.