Do you want a referral program to drive customer acquisition? Maybe you've seen the wild success of Groupon or Fab and want to replicate that kind of viral success.
It’s really just a matter of encouraging your current, happy customers to tell their friends about your company and then convert their friends into new customers. But do referral programs work?
Yes, customer referral programs work!
You may already convinced that you want to build a successful referral program, or you could still be evaluating them. If you fall in the camp of the 'anointed,' then what follows will only make you salivate more. If you’re still on the fence, what follows might be just be the kind of evidence you seek. The Friendbuy team hopes you’ll agree that social sharing and referral programs are really worthwhile customer acquisition tactics.
Here’s a quick rundown:
- Seventy percent of consumers trust brand recommendations from friends, but only 10% trust advertising, according to study from Forrester Research based on a survey of 58,000 respondents. In fact, consumers trust recommendations above all else, including search engine results, consumer reviews, professionally written reviews and even the marketing collateral you put together on your own website.
- You can expect an average of sharing/referral rate of 7%, but you can blow past that and achieve a 30% sharing with some simple A/B testing (offers, copy, images and so on). In fact, one Friendbuy customer recently achieved a 58% sharing rate.
- Sharing -- as opposed to ‘liking’ -- gets your message into the News Feed, where the most attention is paid. In fact, a Nanigans study revealed that shared messages delivered in the News Feed resulted in a 197.3% increase in ROI as compared to message delivered from ‘liking,’ which shows up on the right-hand side of Facebook. In terms of engagement and cost, the News Feed delivered on average 17.1X higher CTRs and 48% lower CPCs.
- On average, every 10 shares leads to 1 conversion
- Referral programs really move the needle – achieving a 1 to 5% lift on overall revenue
- Social referrals are typically the #1 referral traffic source for companies who use them
- Referred customers spend 20% more than a customer acquired by other channels
- A referred customer is 5x more likely to convert than a lead sourced by other means
Referral programs won’t make your teeth whiter, your spirited Labrador puppy more languid or fix a flat tire for you in the dead of the night. But they can boost your revenue, help you efficiently acquire new customers and make you marketing rock star.
What do you think? Are you ready to sign up?