The dynamics of buying and selling are complex. Buyers have a hard time making a purchase if they don’t have much to go off of. For example, no reviews to look at, no other customers to talk to. Sellers have it just as rough too. Closing deals is not easy, especially if you’re starting a relationship from scratch. It’s much harder to convince prospective buyers to make a purchase if they’ve never heard of your company or solution before.
As a buyer myself, I think about the recent experience we’re going through with a house renovation. We’ve got a three car garage and the third by in our garage is about to be converted to a mother-in-law suite. We thought that would be better than the attic ;-). I couldn’t tackle the project by myself, so we needed a general contractor to do the job. We contacted five general contractors. We found all five off of the Good Contractors List, on our own, with no references. Unfortunately, we didn’t know anybody that recently used a general contractor or went through a similar renovation project. If we did, and someone said – hey, try these guys out, they were great and we had a wonderful experience, you bet your bottom dollar they’d be our first call. Doing all the outreach and going through the process with these five contractors is painful and time consuming. When it comes down to it, people get lazy about all that research and most people will take the short route, which is the referral from someone else.
Building referral programs for your business using marketing automation is easy. It’s something every company should do, especially since:
- People are 4 times more likely to buy when referred by a friend – Nielsen
- 65% of new business comes from referrals – New York Times
- The LifeTime Value of a new referral customer is 16% higher – Wharton School of Business
You can see why it makes a lot of business sense to set up a good referral system. Here’s a four step plan to take to build your referral program with marketing automation:
1) Engage Customers
Engage customers through email and/or direct mail campaigns created and delivered with your marketing automation system. Your marketing automation system should have an easy way for you to segment your database to target customers only. This is one way to go back into your database and get a touch point out to existing customers. For new customers, set up a trigger-based automation to have your marketing automation system detect new customers, then fire off the email or direct mail message asking them for referrals. You might want to consider timing your referral request for about 3 to 6 months after they’ve become a customer.
2) Provide a Landing Page
When your referral request goes out you’ll want to send your customer to your purpose-built landing page. Once the landing page is submitted by your customer, you’ll be able to track who is making the referral using this landing page and form built with your marketing automation system. Moreover, when the form is submitted you’ll send an introductory email created with your marketing automation system to the person being referred introducing your company.
3) Trigger Incentives
The web form submission serves as the “trigger” for other actions. When the trigger happens an email or postcard is automatically sent to the referral with a concise and beneficial call to action: “try us”, “free trial”, or gift card. Your marketing automation system can match the appropriate incentive with the referral’s demographics (role, job title, etc.) if needed, setting the table for more precise and relevant communication. Tracking kicks in and the referral’s interaction with your company is monitored. Based on engagement, provide the new prospect with the appropriate level of nurturing.
Using automation, nurture people that were referred but did not respond so that your business remains top of mind when service is needed. Nurturing is a great way to automate touch points and systemize the referral process.
We hope you enjoyed this guide on building referral programs using marketing automation.