Here’s a hypothetical situation.
Greg owns a small company that has an amazing product. However, the product doesn’t get enough exposure and Greg’s marketing efforts haven’t been that successful.
He decides to turn to the power of word-of-mouth marketing to let more people know about his product.
He sends an email to his customers and employees in which he encourages them to help him spread the word about his brand and offers a small remuneration in exchange.
This is the essence of a referral email marketing program– one of the most effective marketing strategies.
Why setting up a Referral Email Marketing Program is a Good Idea
Studies show that referral marketing is one of the most-trusted marketing strategies by companies, whether they are B2B or B2C.
In fact, referral marketing programs generate 3 to 5 times more conversion rates than other commonly used marketing strategies.
Not only do companies benefit from the increase in conversions and the number of acquired leads (Customer referral programs can bring up to 20,000 new email addresses per month), but they also benefit from the quality of the leads.
According to the Wharton School of Business, the Lifetime Value of a referred customer is 25% higher than the LTV of customers acquired via other channels.
Which brings us to the advantages that referral programs have on customers.
54% of customers don’t believe that companies have their best interests at mind.
This shows that customers are reluctant to trust companies. However, customers trust other customers.
In fact, 92% of customers trust referrals from other people. Consumers trust referrals 2 to 10 times more than paid media, and they are up to 4 times more likely to buy a product or a service if it is referred by a friend. (Nielson).
Word-of-mouth clearly works.
McKinsey says that this strategy is responsible for 20% to 50% of all purchasing decisions.
For marketers, referral programs bring several benefits, including:
- Brand awareness: Since the essence of a referral program is word-of-mouth marketing, your brand gets maximum exposure since people are constantly buzzing about your product.
- Quality leads: When your customers or employees recommend your product to their friends or acquaintances, the changes that these people will buy your product are higher.
- Customer Trust: Since the word-of-mouth message is shared among close acquaintances, consumers trust in your product more than they would in a product, marketed through paid media.
1. Send Referral Emails to your loyal customers at the Right Time
The whole point of a referral program is to get your most loyal customers to talk about your product.
You need to give your clients the chance to really learn the value of your product and get to what is called the “Aha” moment.
The “Aha” moment is the moment when your customers truly understand what you are all about, and realize that they can no longer live or work without your product or service.
You don’t want to advertise your referral program to users or customers who haven’t reached their “Aha” moment just yet.
Imagine you had just discovered a new fitness app. You download the app and the second you sign up, you receive an email telling you to refer the app to your friends.
You haven’t even used it yet! How could you possibly recommend it? This is clearly a wrong move.
Give your customers the time to take in your value, to use your product. Help them every step of the way.
Your goal is to get them to reach the “Aha” moment as fast and as efficiently as you can. If you’d like to know how you can do that, check out our step by step guide on setting up an efficient onboarding triggered campaign.
Now, back to the subject.
Choose the perfect timing in your customer’s journey to tell them about your referral program.
You can determine the most adequate time to send your referral emails based on a number of metrics, easily traceable, such as your customer’s purchasing behavior, or their lifetime revenue.
Here are some examples from real companies that might give you some ideas on what to include in your referral email:
Subject Line: “Get 10% off for referring a friend! 🎉”
Notice how they used exactly the right words to present their new referral program. The keyword in the email message is “our most valued shoppers.”
This shows that Tictail knew who to target (recurring shoppers) and knew how to make them feel valued and important.
The exception to the rule:
Subject Line: “Enjoy Setapp for free again”
Here is an example from Setapp, who chose to send a referral email to users who have not yet reached their “Aha” moment.
They offered to the users who have ended their free trial period but haven’t upgraded to a paid subscription yet.
In this case, the users are clearly not ready to become paying users. Instead of losing these leads, Setapp decided to keep them hocked by offering them a second free period lasting up to 6 months if they refer 1 to 6 friends.
This approach has it’s pros and cons: on the one hand, Setapp doesn’t waste their leads and have a second chance at onboarding them and converting them to paying customers. But on the other hand, a six-month free trial period can be a heavy and even risky investment for small companies.
2. Highlight the Benefits Behind your Referral Program: What’s in it for them?
Even your most loyal customers and your daily active users might not feel motivated enough to actually go through the process of referring you to their friends and colleagues.
Put yourself in their shoes and answer this question: why would I go through the trouble of forwarding this email or inviting my friend to try this product?
We are sure you went through the same thing one day.
Imagine you are playing Candy Crush on your phone (or any other equally addicting game). All of a sudden, a pop up appears on your screen, and you read: “Hey there! If you’ve been loving Candy Crush, rate us in the App Store”- or something like that.
Without even thinking, you close the popup. But you actually do love the game. You spend most of your spare time playing it. But, you just think “meh, not now.”.
Imagine if instead, the pop up offered you a special access to a locked level or infinite life stock for the day. I am guessing you would think twice before ignoring it.
Forwarding a referral email or typing a friend’s email address might sound simple, easy and inexpensive to you. But not to your customers.
Give them a reason to go through the trouble, besides simply loving your product. Make it worth their while.
Here are a couple of great examples of referral emails that highlight the benefits for their customers.
Subject Line: “Get $5 off for every friend you refer.”
What better way to highlight the benefits of referral than a huge email headline: “Give Some, Get Some”.
The readers are instantly intrigued and their interest spiked.
Subject Line: Refer your friends and get $$$
Again, this email marketing referral example did it right. Straight to the point, clear and simple.
The GIF is also fun, eye-catching and showcases the financial benefit for those who choose to refer their friends and colleagues.
3. Stand Out! Your emails should be recognizable and well-structured.
You might be thinking: I already know this! But you won’t believe how many brands make the mistake of creating mediocre-looking emails, that look terrible on different devices.
If you want your referral emails to leave an impact, make sure that your email templates:
- Follow your branding guidelines
- Include well-structured content
- Look great on every device
- Are compatible with different email clients
Here’s an example of a great looking email. Immediately when you look at the email, and without needing to even look at who it is from, you know it’s from Airbnb.
The illustrations are beautiful, the colors and the font match Airbnb’s branding guidelines, and the email content reflects the company’s semantic field (travel, share, trip).
(Referral Email Subject Line: Earn travel credit for your next adventure)
4. Show your Appreciation and Keep Your Promise
When your customers sign up for your program and refer your product or service to their friends or colleagues, you should:
- Thank them for being such wonderful and cooperative customers!
- Fulfill your promise: give them what you promised, whether it’s a discount code, or free shipping, or access to a premium account.
Here are some email marketing examples for referrals, showing post-referral appreciation to loyal advocates.
Subject Line: “A friend you referred just joined Massdrop!”
Speaking of advocates…
5. Advocacy Emails
This type of email is optional. Advocacy emails encourage active participants of your referral program to become the ambassadors of your brand.
Creating a hub of ambassadors requires investment, and if your business is ready for it, the investment will pay off.
Sending advocacy emails as a part of your referral program will bring you many perks, including more sales and higher-quality leads.
The Hustle is among those brands that often invite their customers to become brand ambassadors via email.
The Hustle offers to loyal customers the opportunity to become honorary members of their team.
Ambassadors enjoy many benefits, such as testing products, brainstorming ideas with the company’s marketing team, and participating in their exclusive events.
In exchange, future ambassadors need to take a few simple steps and share a customized referral link with their friends.
Launching an advocacy program helps businesses substantially increase customer engagement rates. Moreover, as 49% of people say that they highly rely on recommendations from brand ambassadors, brand advocacy programs will get you high-quality leads and boost sales.
Here’s Another take on ambassadorship programs:
Subject Line: “Hi – I’m one of the founders of Finimize 😊 “
Finimize.com decided to put a twist on the ambassadors’ program, and called their advocates “Insiders”.
They targeted readers who have been subscribed to their marketing newsletter for a long time and offered them to become “insiders” in return of a list of benefits.
6. Don’t forget about your new Leads: Follow Through!
You made it! You have acquired hot new leads that most likely belong to your target segment.
They already have some idea about your brand: they heard all about it from their friend/colleague.
It’s up to you to welcome them to the family and start onboarding them.
The goal is to convert these newcomers to paying customers, as quickly and efficiently as possible.
This should be easier than converting customers coming from other channels, since your referral customers are already somewhat aware of what you offer, and are ready to test your product/service.
The first email you send to your new prospects is similar is sort of a welcome email. The difference here is that you should mention the “referral program”.
Here are a couple of examples that you might get inspired by.
Subject Line: “☁️ Your invite from Matt to join On”
Subject Line: “Join me on Remote.com”
After you’ve sent your welcome email and started tracking the participants of your referral program, it’s time to wake up the dormant customers.
The referral email marketing data that you received after initial sign-ups will help you evaluate the engagement rate of your customers and increase their engagement by sending out follow-up reminder emails.
Such emails are important for an in-touch email marketing referral to keep your customers updated and notify the customers, who have missed your previous referral emails, one more time. For follow-up emails, you can use email reminders or an onboarding email template.
7. A/B Test Your Referral Emails
You might not get it right in the first attempt. And that’s okay. It’s why A/B Testing for emails exists.
Try tweaking the colors of your email, or changing the order of your email blocks.
Maybe alter your email headline or call to action text.
Here’s an example of the same referral email, sent by Airbnb to their customers.
Notice how they changed the headline of the email and the offer behind the referral program in the 2 versions.
In the first email, Airbnb focused on the benefit of earning 25$ by referring to a friend. In the second email, they focused more on the altruistic side of the deal, by telling their customers that they can help their friends get a 25$ reduction on their first booking.
Difference between Referral Programs and Affiliate Programs
Before we wrap up, I’d like to briefly touch upon the differences between a referral program and an affiliate program (as these two are often confused).
An affiliate program is a program set up to engage marketers, influencers, and other industry leaders, who market the product and receive remuneration for the sign-ups they bring.
A referral program is set for customers or employees, who get remuneration for each customer that they bring along.
The difference is also in the nature of remuneration. Affiliate programs often have big budgets, while in referral programs, participants usually receive a one-time discount, gift card or a free product update.
The best way to do referral email marketing campaigns is to state the value of brand-customer cooperation right away.
Start employing email marketing from the start of your referral programs. Send out referral program announcement emails to attract the attention of your customers and track their activity.
Continue with rewarding most loyal customers, as a part of your customer loyalty program, and send out follow-up emails to re-engage dormant customers.
Finally, encourage your customers to become brand ambassadors via advocacy emails.
Following these steps will help you get the most out of your referral campaigns, boost sales and engagement rates as well as improve brand recognition.
Author Bio: Ryan is a passionate writer who likes sharing his thoughts and experience with the readers. Currently, he works as a digital marketing specialist at Flatfy He likes everything related to traveling and new countries.