Referral rewards are types of incentives you provide happy customers for successfully referring their friends and family to your business. Referral programs help online businesses grow by engaging and leveraging a brand’s biggest assets: their customers. What started as great ideas for growing business became well-executed programs that catapulted customer growth, all through monitored and automated referral rewards programs. Like all marketing programs, referral marketing is most effective when managed efficiently and optimized to attract the right customers.
Here are some of the most common and effective Referral Reward exchange programs.
- Cash - Practical, universal, and likely the greatest incentive your business has to offer. Even small amounts, like $5-10 every few months or weeks, are enough to motivate a customer to spend time helping your business grow. As an added benefit, cash is saleable as a referral reward – for instance, your customers will get the same value whether they refer three friends, 30 friends, or 30,000 friends and social media followers. Think of it like a referrals cash bonus or referral compensation in larger companies. Like a commission, your customers can receive small, but still enticing, values of cash for helping refer your business.
- Discount Coupons - The biggest advantage of store referral discount coupons is loyalty and repeat purchases. Store coupons are most valuable when you know a customer will make repeat purchases at your business, with money even beyond the rewards your discount coupons have to offer. There are different types of store coupons you can offer as referral rewards. They can be percentage-off (e.g. 10% off your next purchase) or fixed amount-off (e.g. $50 off your next order). If your store works via a subscription model, a free month is the equivalent of a store coupon.
Store discount coupons used as part of the “friend offer” are perfect for new customers who were just referred to your business as well, as they offer a big incentive to make the first purchase at store. The “friend offer” or “referral offer” is the incentive you give to referred friends and new customers to make their first purchase at your store. Think of it as a little sweetener or push for newly referred customers to make purchases with your business as fast as they possibly can.
- Free Subscription Month - With more and more businesses shifting to a subscription model, a free month is also an attractive offer for both referral rewards and friend incentives.
- Custom Rewards - Customer rewards are a little bit more complex to handle, but the basic idea is to offer something that is outside of the conventional sales transaction.
- Custom Referral Rewards - What is something only your brand can offer? We are getting into extra credit territory here, but custom referral rewards are something to think about. A custom reward allows you to create a unique, branded experience for your customers. Think about the motivation of your advocates and their friends. What do they care about, what do they want to do?