The Best Tactic To Incentivize Customers
Today’s Marketing Hack of the Day: The Best Tactic to Incentivize Customers
[This is a transcription from the Clickx Marketing Hack of the Day video series.]
Hello, I’m Solomon with Clickx.
For today’s marketing hack of the day I want to talk about customer referral programs.
If you have a sustainable business that you’ve build over time and some of your customer base comes from customer referrals then this marketing hack is for you!
I’m going to give you some tips to do that on how to make referrals a big part of your business. The only real requirement is that you have a really awesome business in place, you already wow your customers, and it’s a matter of giving your customers a tool. If you can give them some tools and technology, and you have some report metrics then you’re going to succeed.
Alright, pay very close attention!
Before we get started, I want to talk about how you should be thinking throughout this entire process of building a customer referral engine.
The way you want to go about doing this is to understand that it is an extremely strategic decision and it is not something that is going to be driven by the sales department or the marketing department, you will need a team to work on the entire customer experience and how to get existing customers to refer to their friends or people in their network.
Think strategically. Think about what it’s going to cost to get that customer today.
What would it cost to have your customers refer them? What are your savings? What is the customer lifetime value? What would you be saving by having a program in place and how much can you invest into it?
Most of the time, if you don’t think of it from an investment perspective you’re going to cut your funds really short and you’re not going to really take advantage of it. As a result, you’re not going to see the results you want to. Even if the program cost ten times what you current budget is for your customer referral program, I bet you it might yield if you can look at the customer lifetime value, the average order, and how to incentivize.
So from all of those things happening, you have to take them into consideration. Whether it’s a one time pay or if you’re going to pay them every quarter, whatever it is, you’re really going to have to do your math. Once you think through the entire process, think very strategically about how you’re going to win. Strategy before tactic!
Secondly, once you’re all ready, you’ve got your strategy and you got your numbers, what are you going to pay people? What are the benefits of your affiliate program ore referral program? Then, you really want to build a machine. You really want to build that engine I talked about. You want to use some sort of technology that’s going to help you do this on a regular basis, on a repeatable basis across your entire customer base. By failing to put some sort of technology in the whole equation, your strategy is going to fail.
I’m going to give you some examples of other companies that have done a fabulous job and how they’ve made their customers, and the people they’re referring, feel extremely special.
To start, we’re going to talk about Dropbox.
I’m a Dropbox customer. I don’t know a lot of people who are not, and that’s primarily because the whole strategy for Dropbox was to use it to let other people share their files. When you share Dropbox with a friend, you will get 2 GB back as a way for you to get more free space to add more files to your Dropbox. If I had 10 friends sign up, that’s a lot of space I’m going to get. So this way, people started to share their Dropbox to everyone, their friends, their mothers and fathers, and everybody else you could think of! This is how Dropbox really started to take off.
So if you could think of that instance, and think about what you could give to your customers for free. Obviously, maybe giving away 2 GB may or may not have been a big deal for Dropbox, but it was enough to make a dent in the program that people were willing to share it. If you have a very cool method in which you get something back for sharing, I bet you a million dollars that they will do it over doing it out of their own good will.
If there’s a good company I work with and they do a fantastic job for me, the only time I really would refer them is when somebody is else asks me looking for a company that does X, Y, Z. If there’s already some sort of a loyalty program built into it, I bet you that I would be more likely to suggest the company without having them ask me first.
In order to influence somebody’s behavior, you really want to build some technology and awareness as to what this program is and how it’s going to benefit everyone.
Alright, so that’s rule number one. Think of a way that you can use this with every single one of your customers and what it is that you’re willing to lose in order to get the upside of someone as a new customer. So it really has to be around doing your numbers, understanding the lifetime value, and what it’s going to cost you to acquire that customers today.
Secondly, if you could remember how Gmail started way back when, it was all through referrals.
It was one friend telling another friend. When you got an invitation to Gmail, you only had 5 invites that you kept very precious to give out to your best of best friends to get on it. They didn’t take it off of beta for so long because they didn’t want everybody and anybody to be able to sign up, they kept it really previous. Today, everybody has a Gmail account, but way back when, it was one of those unique things that everybody wanted it, but they didn’t have it. So, think about how you can actually give the product to build an excitement around it, and people will do all the sharing themselves, without you having to do anything. Again, this sort of thinking in terms of scalability and using some sort of technology enabler to be able to do that. Again, you need to be able to track who’s winning, gamify the entire system and trust me, people will take advantage of it and they will share it.
Now, if you’re using a platform like Clickx, we actually enable our businesses to capture all of the moments that customers are having. Whether it’s positive experience or a negative experience, we give them a landing page, we capture it, and we store this information in the backend so they can put it into their marketing messages that they can use in their brochures or flyers. By doing this, they can capture all the information and use it in their marketing materials. Also, the customers who are leaving good reviews will have the ability to share it on their social media, such as Facebook or Yelp, building more content and trust, getting your word-of-mouth marketing go even further.
We’re giving you an entire platform just to do that. This is just one example of how you can use our technology to grow this referral base of customers.
Finally, I think I have a really good example of one company that’s really nailing it, it’s amazing how they’re doing it. So when you become a customer with Tesla, you’re already an affiliate. The way that they’ve done it is really amazing. So first off, when you become a customer, you get a short URL that you can send to your friends as a referral. The person that’s receiving the link will save about $1,000 towards buying a new car and the people that are sharing the link get maybe a new set of wheels or invited to a product launch party depending on how many you’ve shared. There are so many ways they’re doing it and they are doing a fantastic job, because they’re changing it up all the time, keeping it exciting and they’re finally using their customers to sell the product for them. By offering $1,000 towards buying a new car, you’re reducing the cost of your sales people’s time, your salespeople no longer have to do the selling, if somebody’s coming in they’re probably ready to buy. They’re incentivizing their customers to buy and I think they’ve done a brilliant job and they deserve a shout out.
So like I said, if you could really think of a way that’s going to help you acquire new customers, for a fraction of the cost today, and all of your numbers work in terms of what you’re willing to risk, and you have some technology to track and control it, then you’re going to be off to a great start of having a really streamlined customer referral program. I’ve seen this work time and time again, I’ve heard so many great stories from it. Hopefully you can put this to use in your business.
Thank you for watching another edition of Marketing Hack of the Day.