[MUSIC PLAYING] JON MURPHY: In this lesson I want to talk briefly about the power of referral programs to capture additional customers at lower acquisition costs expanding your brand awareness to new potential customers and incentivize your existing customers for spreading the word. Happy customers are already your best avenue for brand and product evangelism. A direct recommendation from a friend or colleague goes a long way.
A direct monetary incentivization for both parties involved is a great way to push this recommendation to happen faster and more frequently. There is plenty of software out there to help make this happen and even track its effectiveness. A good way to take this to the next level is putting a clock or a scale on the referral incentive for the existing customer to reap an even larger benefit. For example, if they share the referral code with one of their friends they receive a 10% discount but if their friend uses that unique code for a first time order within 30 days of the original purchase that percentage increases to 20%.
This is a win-win for your company since you will not only gain a new customer but you're also only paying out on the promotion if the original customer repurchases. Another way to approach this is by having an increasing scale for existing customers to earn either higher discounts for each new customer they refer who uses their trackable code or incentivize them in other ways by tying in loyalty programs where they are eligible to earn a higher and higher amount of points for each new customer they bring in.
If your business is seasonal or prone to revenue peaks and valleys, you can encourage additional sales during down months by doing temporary referral sprints, where for a certain period of time a customer's promotion for sharing increases sharply for every new sale that comes in during that window with their referral code. As in most elements for post purchase marketing, the overall success of the campaign is going to depend on getting the promotion in front of customers at the right time.
This is where your automated messaging comes into play. You can start driving awareness to referral programs from the confirmation email on and incorporate it discreetly into each and every automated message that you send out. Even if it's just one or two sentences in an otherwise unrelated email that encourages customers to click through and learn more. I also suggest you to send a dedicated automated email shortly after your product is delivered to fully dive into the program and all it has to offer.
Timing is key here. So you want to deliver this message within a small enough window after they receive the item for the purchase excitement to still be fresh but long enough that they have actually had enough time to test it out and see if it's something they are willing to recommend. [MUSIC PLAYING]