Why A Referral Marketing Campaign Is Perfect For Holidays

It’s that time of the year again when people start buying new things and gifts for their loved ones (and maybe themselves, too!). With advanced technology, buyers are flocking to online shops instead of spending long hours in physical stores. This is great news for brands that can market and sell their products to a much larger community, increase conversion rates, and grow organically with the help of a referral marketing program.

Starting a referral campaign is key for maximizing the potential of word-of-mouth marketing during this crucial time period. Astonishing 92% of customers claim they trust friends and families’ recommendations over any other form of advertisement. And the good news is that Tapfiliate is a powerful referral tracker that’s ready to help you keep track of your referral program and break records this holiday season.

What is a Referral Marketing Campaign?

As the term suggests, a referral marketing campaign is a method of leveraging your business through existing customers, a.k.a. referrals, and word-of-mouth marketing.

Paid advertisements are good and well, but they’re often more expensive and less effective in terms of building trust and expanding your customer base reach, compared to referral programs.

As reported by Ironpaper, word-of-mouth recommendations and testimonials play a crucial role in 80% of all B2B and B2C transactions, making them an excellent way to increase your customer acquisition.

Why You Should Start Your Referral Marketing Programs During the Holidays

End of year is packed with big holidays. Thanksgiving, Hanukkah, Christmas, and New Year Eve are only the few major ones. The worldwide culture of gift-giving for holidays means that people will be shopping intensely up until the end of the year in hopes of finding perfect presents for their loved ones, relatives, aсquaintances, colleagues, and neighbors.

Out of hundreds of millions of online shoppers, a big part will be looking for recommendations and tips from their social circle in hopes of sorting out the gifts as soon as possible and moving on with their lives.

That’s where your referral program comes in place.

Imagine Bob.

Bob is your loyal customer and he loves your product, but doesn’t really talk about it much, apart from a few cases over the years.

Now what if you could offer Bob a referral link and a code that he can share with friends and earn commission? Not only does Bob already enjoy your products, but now he can make extra cash, discounts, or other bonuses by recommending it.

Next thing you know, Bob is making an Instagram story or a TikTok where he raves about all the cool things your brand offers and leaves his referral code on the screen and a referral link in the description.

Boom!

Clicks and sales start to come in from Bob’s friends, university friends, and colleagues.

As a result, Bob loves your product, gets bonuses from sharing it, and you get a number of new customers who, in turn, can also become your referral partners in addition to generating you extra revenue.

It’s a perfect win-win!

Despite being an excellent promotional tool for companies and a powerful way to support loyal customers, only 22% of businesses use referral tools to scale their operations, and, according to Harvard Business Review, those that do experience up to 86% higher revenue growth rate.

Here are 5 key reasons why you should join the minority and implement a referral program this holiday season.

#1 Stand out from the competition

Holidays are intense when it comes to competition.

Many businesses want to stand out since this is the perfect time to make huge sales and gain new customers. Spreading the word that you have a referral program can help you distinguish yourself from everyone else.

Pro tip: Although only every fifth company, on average, has a referral program, be sure that all of them will be running ads and encouraging new and existing referrals. In order to truly stand out, go the extra mile, for example:

• Double the rewards during particular weeks to encourage people to talk during your hottest quarter.
• Send gifts to the most active referrers and announce this plan to all partners.
• Offer them generous discounts for your own products that are not available publicly.

The key for you is not only to announce your program in hopes of standing out, but offering cool bonuses that existing and potential referrers will be interested in pursuing. They’ll also be busy during these final months of the year, and if we want them to dedicate time to promoting our products, then we need to be generous with what they get in return.

#2 Meet your target revenue for the quarter and the year

Many companies will have their end of the financial year in December. Absolutely every business will forecast the October-December period to be their top revenue generator.

Whether your sales were good or low throughout the year, you’ll be counting on these few months to bring you an impressive chunk of turnover and make shareholders happy.

When stakes are high, every little helps. And given how successful word-of-mouth promotion can be (when your product is also high quality), there is no reason not to go ahead with referral campaigns.

Your most loyal customers will probably be purchasing from you during this time, and you should work on them too. However, new customer acquisition is where the revenue potential is also very high.

Those who are not familiar with your product line yet can opt for bigger and more expensive options this holiday season. And even if someone starts their customer journey with you from smaller items, you’ll be able to upsell and cross-sell them down the line. Possibly even within the same holiday season.

By having your customers more actively engaged in promoting your products and bringing in more customers, you’ll wrap the year in success.

#3 Build a better customer base for next year

Part of a business’ yearly forecasting and marketing strategies planning is dedicated to building a larger and better customer base. With referral programs, it’s easier and more cost-effective to add new people to your customer base.

Leads from referrals convert 30% better on average, and their lifetime value is 16% better too. Isn’t that the music to business owner’s ears?

For example, you have 100 active referrers for this year. If each of them can bring in at least 10 new clients to your business, and these clients are satisfied with your products and services, you’ll have 1,000 new loyal customers just coming from the holidays. This is already a great increase with just 2-3 months of a marketing campaign.

#4 Capitalize on people spending significantly more during the holidays

Holidays are great for eCommerce, SaaS, retailers, and subscription service providers, as people feel more generous when spending money. You might be counting each cent when you’re buying something for yourself, but splurging on your friends and family is no problem at all.

That’s when premium and limited editions are easily sold, even if they’ve not generated much revenue for 6 months prior. The hype is real and not making use of it with referral marketing is unforgivable.

Pro tip: Help your referral partners promote you more effectively during the season when people’s heightened demand for goods is at its maximum capacity.

Your product may be great and referrers persuasive, but it makes sense to come up with exclusive deals that prospects can get via your partner network. This can be additional discounts or extra free months of subscription. Or you can go for something more creative, such as seasonal customizations or special holiday packaging. Even a little bonus will entice leads to go to your website and use referral codes to get a hot deal.

#5 Launch new products with a bang

Since the holiday season is all about sharing, caring, and giving, people are on the lookout for new stuff. It might be gadgets, clothes, merchandise, home appliances, or even new equipment for your remote work. With this holiday hype, you can also introduce new products to the market.

The only hurdle is how much trust consumers will have in this new product. Yes, some will not care about reviews or ratings and will simply go for the new hot thing.

For many, though, this can be an issue. They’re buying gifts, after all, and they need to be perfect for their friends and families.

This is where referral programs come in. When you already have loyal customers, they will most likely be curious and give your product a go, no matter what it is. Some of them will also talk to their social circles and share that their favorite brand has something new in store.

And this is exactly what any new product needs – a boost in sales right after launch plus a loyal audience of customers who’ll be excited and open-minded, and incentivized to talk about your new releases with others.

Tip: Assigning just anyone in your team to take care of your marketing campaigns and referral programs could lead to disaster. Modern marketing is an expansive field. Businesses, especially SMBs, can benefit from professional assistance as it requires different marketing techniques, tools, and skills to accomplish successfully. This demand also comes with the increase of marketing major salary, enticing students to pursue this degree.

How to Start a Referral Program

The idea behind a referral marketing campaign is simple – offer bonuses to customers that recommend your products. It’s the execution that requires thorough planning and hard work.

But don’t be discouraged with having to set something up. Referral program is a great marketing channel that can (and should) be added to your digital marketing mix.

Follow these steps to establish your referral program successfully and hassle-free.

Make sure your customer care is excellent

A happy customer is more likely to want to share your business with friends and family if their overall experience with the company is positive.

Sales teams and customer care need to be on the same page and provide outstanding service. Otherwise, you risk putting a lot of effort into promoting the referral program but missing out on great brand advocates who won’t have enough trust in your workflow to risk their reputation and recommend you.

• Make sure everyone in sales and customer care gets training, internal or hosted by professionals.
• Introduce automation, such as chatbots, to help customers look for information and sort minor queries at their own pace.
• Create a list of guidelines for your team to be in sync. Include preferred tone of voice (TOV), clarify whether emojis and slang are allowed or not, and outline key principles, such as leading with empathy and kindness.
• Help your team be more efficient. Invest in a smart CRM system and an omnichannel platform that will unite all messengers, emails, and calls under one console. That way, your team won’t waste time or forget about some of the chats with customers.
• Act on the feedback you’re getting. Don’t just ask customers for their opinions on your pre- and post-sale performance. Make sure you fix and improve things and share updates online.
• Aim to have customer support in multiple languages. Analyze your top target markets to make the decision on what languages to pick up.

Know your existing customers

To start a referral marketing campaign, you need to know your existing customers. If it helps, sort them according to the most active buyers and those who only purchased once or twice in your shop.

Look for common patterns, interests, and ways to segment them into smaller groups.

• What is your customer’s lifestyle?
• What is important to them in life?
• How does your product help them?
• What do they look like?
• Where do they live?
• What else are they buying and spending time on?

Existing customers should be as important to you (if not more than) as prospects. It’s a well-known fact that selling to an existing customer is much easier and cheaper than going after cold leads. Also, these people have already invested in you and trusted you, so it makes sense to prioritize developing a relationship with them.

The stronger your relationship, the more likely they’ll agree to become referral partners and promote you actively.

Don’t ignore your new customers

Referral programs are traditionally reserved for existing customers, but that shouldn’t stop you from promoting them to prospects.

In fact, you can even use it as a selling point and come up with a scheme where you give new customers discounts if they refer someone to you within the same day. Or you can also share all the benefits that referrals get, enticing leads to turn into customers.

With referral programs, you need to strike a balance between nurturing your existing customer base and looking for potential partners.

No matter how loyal your current referral base is, they won’t stay your advocates forever, plus their networks are not unlimited. That’s why you need newcomers to join you regularly to keep up and scale.

Tip: Think about keeping your referral program open to everyone, as sometimes all it takes is one customer interaction to make people become loyal brand advocates.

Set your objectives

Like any marketing strategy, referral campaigns need to have specific objectives.

Doing something because everyone else is doing it is a recipe for a disaster.

When designing your referral program, ask yourself:

• What outcome do I expect from my referral marketing program?
• Are my objectives tied to sales and revenue, or do I strive for brand awareness?
• Am I looking to build a larger loyal community?
• What referral program KPIs make sense for my business right now?

Test your objectives against the SMART goal planning model:

S – specific

M – measurable

A – attainable

R – relevant

T – time-bound

For example, instead of saying that you want more referrals, specify that you want 10% of your customers to become referral partners. This goal is measurable, because you know how many customers you have in total, you can calculate 10% from it, and compare reality with your goals.

Attainable means that you won’t go too overboard, for instance, by planning that 9 out of 10 customers will be successfully referring new leads every month. That is not possible, unless you produce elixir of eternal youth.

Your referral program goals should also be relevant to your overall business goals. For instance, brand awareness is desired when you’re only starting out. However, mature brands with impressive market shares usually focus on growing their average order value (AOV) and the frequency of purchases by existing customers.

Determine your ideal customer

You already have a list of your regular customers and your campaign objectives.

Before asking your customers to look for referrals, first determine what your ideal customer looks like. For example, if you’re selling fitness products, your perfect buyer would be adventurous and sporty.

On the other hand, if your products are homeware and appliances, you may want to target moms or dads, as well as people above a certain age group.

You can also look into other factors, such as your customer’s location, their occupation, and values.

Choose your hosting channels

When choosing the channels to host your referral campaign, social media is the best platform by far.

Referral programs on social media influence as many as 71% of buyers. Some of the top social media platforms are Facebook, Pinterest, TikTok, and Instagram, and your best bet is to be present on every platform that your audience fancies. For example, Gen Zs are not very fond of Facebook, so TikTok and Instagram can be your primary choices.

Tip: If you’re not sure what social media platforms your customers use the most, now is the perfect time to find out!

Next time you run a questionnaire, make sure to include this question. Also, ask them straight on social media platforms. For Instagram, you can create a series of Stories with polls. Keep them to the point and design them nicely so people don’t just scroll through and ignore you. Also, you can mention that you’re planning a lot of good stuff for the future, and getting those answers will help you provide everyone with the most value.

Don’t try and limit the number of platforms you’re present on purely because of the management overhead. You can use referral tracker software like Tapfiliate to keep track of your referrals automatically, so that should not be a concern at all. Focus on being there for your customers, and automated referral marketing software will do the rest.

Get started with referral marketing now with 👉 Tapfiliate’s free 14-day trial. 

Identify your incentives

Referral-based selling only works well if there is a great incentive for your customers to do so.

Cash doesn’t always work, as well as discounts and credits.

Try adding non-cash customer referral program ideas, such as:

• Free subscription period
• Loyalty points
• Exclusive discounts
• Cashback
• Store credits
• Gift cards

As you first announce your referral program, watch out for feedback and listen carefully to what your customers are saying about incentives. You can ask about their preferences prior to the launch, but people don’t always know what they really want and what will drive them to promote your products.

That’s why it’s best if you leave some room for experiments to see how those incentives perform in real life. At the same time, refrain from changing T&Cs too often because nobody will be able to keep up. Plus, accumulating bonuses will be much harder, and customers will be discouraged.

Create a landing page

Last but not least, you need to create a landing page with all information about your referral program.

Build a landing page where they can easily sign up, and make it as simple as possible for them to refer a friend.

• Create a shareable template text that they can copy-paste and send off.
• Design a section for them to add their friend or family member’s email address.
• Highlight their referral code and a referral link to ensure they always have easy access to it.

Tip: Include the terms of the marketing referral agreement on the page somewhere as well – include rules about where they can and can’t share your business.

Experiment, Experiment, Experiment

Working on your referral program never really stops.

Surely, you do the biggest chunk of work at the start when you’re launching everything. However, you need to keep on improving and enhancing your referral system to maintain long-term success on that front.

Also please remember that just because something is working well now doesn’t mean you can’t get better results with new strategies. Equally, if your current referral program is underperforming doesn’t mean it has to stay like that forever.

Look at Airbnb. It’s hard to imagine this giant failing at anything, but their first take on a referral program wasn’t a success they hoped it would be. It took the company months and countless tests until they landed with an amazing result. The new, improved referral campaign produced them 300% more signups and bookings than before.

Don’t Wait! Start Your Referral Partner Marketing Campaign this Holiday Season

Amazon CEO Jeff Bezos was right when he said, “Word of mouth is very powerful.”

If you build a great customer experience, people will notice, and they will be talking about that. On the other hand, if your customer service is poor, you won’t be able to keep it a secret, and your business will suffer.

We are hoping that with this article we helped you see why a referral marketing campaign is one of the best ways to gain new customers and increase your sales organically. Holiday season or not, referrals are powerful. People influence people, and customers believe recommendations more than they do ads.

Start your own referral program now, and have the best holiday season yet!

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