Word of mouth is one of the most effective forms of marketing, but one of the most difficult to control. You can't force someone to talk about your company, much less give you a good review. But your customers' voices hold power - more power than your brand's voice.
In fact, 92% of consumers say they trust referrals from their peers, and 74% say word of mouth is a key influencer in their purchasing decisions.
Amazon's Jeff Bezos says, "If you do build a great experience, customers tell each other about that. Word of mouth is very powerful."
It is through word of mouth that the best brands are built. Take it from Zappos CEO Tony Hsieh: "We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing. Historically, our number-one growth driver has been from repeat customers and word of mouth."
Word of mouth is also a low-cost way to bring in new customers. But how do you make it happen? You must first launch a referral program. Follow these seven steps to run your first referral program and start harnessing the power of word of mouth.
1. Set goals
Before you even put any sort of plan into motion, you need to sit down and think about your why. What do you hope to get out of a referral program? Besides the obvious reason - to increase customers - what do you want? Perhaps you're looking to increase customer loyalty, grow sales, turn more customers into lifetime customers or get more brand advocates.
You must identify these goals so that you'll be able to measure the success of your program. This way, you'll have something to point to and measure against to see how effective your efforts are.
2. Define the message
Your referral program must be easily understandable and easily doable. If it isn't, potential customers won't give your brand a second look. Make sure you clearly outline how the program works, what your customers must do and how to do it. Make your call to action clear and prominent.
Airbnb does a good job of this. On its landing page, the company has a strong call to action that clearly states what to do and why to do it. Then, lower on the page, it details the specifics of the program as well.
3. Choose an incentive
Merely asking your customers to refer a friend isn't going to entice them enough to do it. You have to offer some kind of incentive. This could be a monetary incentive, such as a discount on your products or services, but it doesn't have to be.
For example, Dropbox has one of the most successful referral programs, and it doesn't cost the company much, if anything. In exchange for referring a friend, customers are given up to 16GB of free space.
Whatever you decide to do, make sure the incentive makes sense for your brand and for your customer. Put yourself in their shoes and think about what you could offer that would benefit them the most.
4. Make a landing page
You need to have one central location where customers can get all the information about your referral program, such as a dedicated landing page on your website. When setting up the page, make sure it's easy to find.
Make the page easily accessible from your home page by including it within your main navigation. Then optimize the page using SEO best practices to ensure others will be able to search for - and find - you.
This page will be where you include your main message and call to action as well as all details about how to submit a referral. If possible, include a form right on the landing page to make submitting the referral even easier.
5. Focus on analytics
Before you launch your referral program, make sure you have your analytics set up using Google Analytics or other software so that it's easy to track the success of your efforts. You'll need to know how people are getting to your landing page, including where they're coming from and what they clicked on.
Once you know which channels are most successful, you can boost your efforts there. And if any channels are performing poorly, you can direct your efforts elsewhere.
Measuring the results of your referral program will also come in handy down the road when it's time to prove the value of your efforts to executives or other leaders in your organization
6. Spread the word
Digital marketing strategist Samuel Edwards says one of the top reasons referral programs fail is a lack of focus on the rollout. "The actual terms and conditions of the program are easy to develop, but the marketing of the program is where businesses come up short--and a weak rollout almost always leads to an underperforming program," he says.
You have make sure people know about your referral program - and that means you need to pull out all the stops. Come up with a schedule to promote your referral program across social media, email and your blog. Use as many channels as makes sense to ensure you reach as many people as possible.
7. Train employees
Your best brand advocates are your employees. By informing them and training them on your referral program, they can be just as effective as any marketing channel. Make sure they are clearly educated on the details of the program and how it works so that they can talk about it and explain it to others.
Encourage them to talk about the program with their friends and family and to share it on their personal social media channels. Their messages will add validity to your brand and widen your reach.
Ready to launch your referral program? What do you have planned? Share your ideas in the comments below: