5 Referral Marketing Mistakes You Can’t Afford to Make

Avoid Making These 5 Referral Marketing Mistakes

Referral Marketing is extremely popular today – and rightly so. It’s an incredibly effective means of leveraging existing customers to acquire new ones that’s both cost-effective and high returning. But do you know what you’re doing? Correcting a few simple mistakes could mean the difference between success and failure.

Referral Marketing Consultant - Ray L. Perry

Why Referral Marketing?

You’ll hear a lot of people overcomplicate the idea of referral marketing, but that isn’t helpful for anyone. In its simplest form, referral marketing is the act of leveraging past customers and clients to acquire new ones through positive word of mouth and glowing recommendations. In the purest sense, referral marketing is totally free and entirely organic. Not sure how effective this strategy would be in your current situation? Consider the following statistics from this ReferralCandy infographic.

Referral Marketing - Renewable Referrals Book - Ray L. Perry

There are plenty of other statistics to highlight the value of referrals, but you get the picture. If you’ve never considered referral marketing in the past, now’s the time to rethink your approach. Referral marketing is a high-returning, far-reaching method that costs little, yet provides much in return. Give it a shot this year and see what you think.

Five Referral Marketing Mistakes to Avoid

It may be easy to get started with referral marketing, but it’s also easy to mess up. So many referral marketing campaigns get stopped in their tracks by debilitating mistakes. The good news is that most of them are avoidable. In order to help you evade a similar fate, let’s check out some of the most common mistakes.

1. Creating a Selfish Program

The goal of a referral marketing program, from your perspective, is to cost-effectively generate new leads. And while that’s fine, you can’t make a referral marketing program about yourself. The only way these programs are successful is if they have the referring customer in mind.

Your current customers want to know they’ll be rewarded for bringing you new customers, otherwise the effort isn’t worth their time. The structure of the program, the ways in which you engage your customers, and even how you word different aspects can directly influence the success of the program. Keep this mind and be conscious of how you’re coming across.

2. Failing to Properly Incentivize

A customer may like your products and have a positive impression of your brand, but – as mentioned – they aren’t going to participate in a referral marketing program if there isn’t something in it for them. This speaks to a common mistake that many businesses make: failing to properly incentivize action.

According to expert Emma Siemasko, the top five incentives that work are discounts, cash, credits, swag, and gift cards. As you’ll notice, four out of the five incentives deal with money (in one form or another). Money talks and your customers are much more likely to respond to it than some knickknack with no intrinsic value.

3. Making it Too Complicated

“If your referral program isn’t public facing or it’s difficult to use and share with the click of a button, then you’ll severely limit your ability to drive word-of-mouth and referrals,” marketer Zach Taylor explains. “Also, if you’re requiring customers to manually input a potential referral’s information, good luck. For customers, this annoyance creates a barrier that significantly hinders referral activity.”

Simplicity matters more than you can imagine. If there’s any trace of friction, you’ll find that most customers – even if they’re loyal to your brand – won’t go out of their way to refer others. They’ll see it as more of a nuisance than anything else. Focus on keeping things straightforward and cut out any language or steps that don’t matter.

4. Failing to Test

Before investing a lot of time into a full-fledged referral marketing program, it’s smart to test things out with a pilot program. Unfortunately, a lot of brands make the mistake of diving right in. This often results in a misguided strategy that fails to resonate with the target market.

But even after you launch a pilot program and then transition into the real program, it’s imperative that you continue to collect data and study the results. This will allow you to observe what’s happening and make important tweaks that ensure future success.

5. Giving Up Too Quickly

A referral marketing program may look simple on the surface, but what you’ll discover is that it takes a lot of hard work on the front end. You have to see what works, try new things, and deal with unique issues as they emerge. With that being said, you can’t make the mistake of giving up too quickly.

Behind every successful referral marketing initiative is a patient individual (or team of people) who is willing to stick with the plan and stay on track (even in the midst of challenging circumstances). That person can be you!

Learn More About Referral Marketing

Referral Marketing Expert - Ray L. PerryReferral marketing may be something that you’ve written off as an outdated or ineffective strategy, but it’s anything but these things. Ask any company with a successful referral marketing program in place what they think and they’ll likely tell you it’s their most profitable, high-returning method of outreach.

Put simply, referral marketing works when executed in the right way. If you’re interested in learning more about the power of referral marketing programs and how you can fill your sales funnel with more qualified leads, check out Ray L. Perry’s book titled “Renewable Referrals: How to Cultivate More Profits.” In it, you’ll find actionable advice, real world examples, and creative techniques that many of Perry’s most successful clients have used.