How to (Better) Monetize Referrals
ord of mouth marketing and sales efforts focused on referral leads are a double-sided blessing. On one hand, you’ve got a (likely) free source of lead gen chock full of just the type of buyer you want in your pipeline. On the other hand, you’ve got an unreliable and uncontrolled source – one that could be great and could be not-so-great – but which you might have little direct influence over.
It’s like Willy Wonka’s Golden Ticket – great if you find it but leaving a little too much up to chance if you’re relying on it.
Naturally, there’s a better way to do things. And you won’t even have to hire a bunch of Oompa-Loompas to get it going. Even more good news? It’s a pretty clear, step-by-step process that will quickly show whether or not it’s working.
Making Referral Leads Work for You
Step One: Audit word of mouth leads. Understand, first of all, if these are the deals that make most sense to pursue. If they’re small, annoying potatoes, keep doing what you’ve been doing. If they’re meaty, take a look at your referrers and see if there are any themes between them. Once you have an ‘ideal referral partner’ and ‘ideal referral lead’ defined, you’ll be that much more likely to find more of each.
Step Two: Reach out to your referrers. Assuming they’ve been referring you with no direct incentive, now’s the time to up the ante. Tell them you’re so pleased with the referral leads they’ve generated, so thankful for their awesomeness that you want to pay for the past ones (this is key) and all new ones. Don’t cheap out and just try to pay for future referral leads. Act in good faith.
Step Three: Look to your other happy customers. Is there anyone in there that fits the themes you ID’ed in step one? Prioritize them. Reach out and offer a lead referral incentive program. And if there’s no one you can pretty immediately prioritize, start reaching out to anyone who you’ve got a good relationship with, has left you a positive review online, has answered an NPS survey an 8 or above. You know the drill.
Granted, necessary to make any of this work, you’ve got to sort out how and what you’ll reward these folks with. This is where testing comes into play. For Steps Two and Three, try some good old-fashioned A/B testing. See if they’re more likely to refer when they get an $x discount or straight cash to them personally or cash to their company or cash to a nonprofit. Play around and see what resonates.
The key here is that you want to take control of your referrer network, apply some analytical and marketing rigor and spend some money on the process. Don’t let all the golden tickets go to losers like Veruca Salt. Because your customers might refer once but without any sort of acknowledgment or reward, chances are they won’t refer again.