What Exactly is an Online Referral Program? Defining the Concept to Ensure Success

What Exactly is an Online Referral Program? Defining the Concept to Ensure Success


If you're thinking about setting up an online referral program, the first critical step in ensuring your success is defining exactly what an online referral program is. Understanding the ins and outs of the concept will help you create a referral program that will work perfectly for your business. If you're ready to dive into referral marketing, this is the place to start.

An online referral program is a program that uses your existing customers to help spread the word about your business. Chances are, you have a number of happy customers who have used your business several times. When they're looking for a product that you sell, they come to you first. If they need a service that you offer, they're already picking up the phone to call your business. Those satisfied customers will naturally recommend your business to friends and family members who let them know that they have similar needs, but they may not take that marketing as far as it could go. By fully utilizing these customers through an online referral program, you can be sure they're spreading the word to as many people as they can.

An online referral program keeps things simple. Ideally, an online referral program should be as simple as possible for both your existing customers and your new customers. Requiring a new customer to remember the name or email address of the person who sent them, for example, might result in a number of people who have given referrals without getting the credit for it later. It should be equally simple for your existing customers. The more clicks are required of them, the more likely they are to give up--and that means fewer referrals for you. You can offer referral rewards through social media, email, or directly through your site to encourage your customers to use the platform that's most convenient for them.

An online referral program offers incentives that your existing customers want. You want recommendations from you customers. They want deals on their next purchase from your company. By offering them those incentives whenever they bring in a new customer for you, you can encourage customers to do your marketing work for you. Like the referral process itself, rewards should be simple and straightforward. Offering a discount on the customer's next purchase will quickly draw them in. A points system, while more complicated, can also provide adequate incentive. 

The simplest definition of an online referral program is this: an online program that offers existing customers incentives to refer your business to their friends and family members. By utilizing the three characteristics listed above, you can create a referral program that will help increase your business with little marketing effort on your part. Even better, it will create a higher level of satisfaction in your existing customers, bringing them back to you more often.

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