If you’re reading this, there’s a 15% chance that a friend or colleague referred you.
That’s good news, both for you and for us. Referral programs are a powerful tool for growing your newsletter or your business when you get them right.
If you want to start a referral program, first answer these two questions:
- How much are we willing to pay for new customers or subscribers?
- With that in mind, what’s something your customers want that you can afford to give them?
It’s simple math, really. Imagine you’re an e-commerce brand handing out $20 gift cards whenever referrals make a purchase, and your average order value is also around $20.
You might break even at first. But if your customer lifetime value is $100, it’s immensely profitable over time.
Once you have a couple rewards in mind, here’s the advice we’d give ourselves if we could go back in time:
- Create customized referral messaging. When you refer someone, they hit a landing page that reads “Your friend thinks you want to be a smarter marketer.” Personalization boosts conversion.
- Only advertise one or two referral rewards at a time. Our referral program has nine rewards in total. But, if you’ve noticed, we normally advertise one reward at a time. This reduces overwhelm and creates one specific goal for people to aim for.
- Give the people what they want. A lot of our referral rewards used to be branded merchandise. And while we love our branded merch, what you love is good marketing content. So today, six of our nine rewards are content-focused.
That’s it for now. We’ll share future insights into how you can leverage giveaways to give your referral program a helpful boost, so keep an eye out!