Referral Programs to Increase Leads: How to maximize lead generation in a slow economy: The SLMA

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Referral Programs to Increase Leads: How to maximize lead generation in a slow economy

Chris Edwards | Articles > From the section: Lead Generation

November, 2014 |

AdTrack, Vice President, Sales & Marketing

When the economy tightens, companies look for ways to squeeze every drop of productivity out of every lead. Referral programs are a way to turn one lead into several additional leads. But how do you structure a referral program to ensure it produces the leads you want?

Referral programs are based on the assumption that "birds of a feather fly together." Your current lead or customer will know others who share the same demographics or characteristics of your target market.

Here is a list of tips and best practices to create a motivating and lead generating referral program.

1. Address the WIIFM: WIIFM means what's-in-it-for-me. Your original customer or lead may not be motivated to make referrals unless they receive a reward for them. However, make sure that the rewards you offer are tangible and will motivate your target audience. If your target audience is women age 25-44, it's unlikely they would be interested in a gift card from an auto parts store.

2. No Rewards for Luck: Don't make the reward a game of chance. For example, avoid additional entries in a drawing or awarding a scratch-off ticket. People assume that "no one ever wins these things." Scratch-off tickets are perceived as a cheap way to avoid giving a reward to anyone.

3. Spend Enough to Generate Leads: Spend enough on the reward to strongly motivate people to make referrals. A $10 gift card from a company whose average sale is $400 won't motivate.

In tough times, ask yourself, what has your target audience cut out of their budget that you can replace? Sometimes it's the simple pleasures that motivate people, such as gift cards for restaurants, gasoline or movie tickets.

4. Loss Leader for Market Share: Calculate the cost of the reward into your cost to acquire a lead. Can you afford the reward you want to offer? If your goal is simply to grab more market share, you can offer a more expensive reward, even if it raises your lead generation costs.

5.Reduce the Hoops: Don't make the referrer jump through too many hoops to get the reward. Bad example: "If your referral spends $300 or more, we will send you $25." The referrer can't control how much their friend will spend.

6. No Budget for Rewards: What if you have no budget for rewards? Sometimes the simple and inexpensive things can be just as effective. Example:

Send a Thank-you: Send a personalized thank you letter or email to your newly acquired lead or customer. Don't make this a "kitchen sink" thank you. Instead, keep the email or letter simple and include only two thoughts:

1)Thank you for your inquiry, and

2)If you know others who might use our product, please refer them (include a "refer a friend" link in the email that points to a Web page form where people can enter the emails of friends).

7. Get Sign-Off: Make sure all of your internal stakeholders approve of the reward and can support the delivery of the reward.

Managing Referred Leads

How do you manage a lead that comes from a referral? A referred lead is treated differently in your lead management system.

Most marketers automatically classify a referred lead as a "warm" lead. However, it's important to remember that you may not know as much about the referred lead as you do about other warm leads in your lead management system. That's because the lead probably hasn't yet answered your standard lead qualification questions.

Treating the referred lead as a "warm" lead means that your sales team will more quickly contact that lead as compared to a cold lead. A sales person will ask the referral your qualification questions to determine if this lead should be elevated to a "hot" lead, re-classified for nurturing or eliminated from the lead management system as "not a prospect."

Many companies' new customers come from referrals. Treat a referral as a gift that helps your company more quickly achieve its sales goals.

About the Author

Chris Edwards is the Vice President of Sales and Marketing at The AdTrack Corporation, a full service lead management and literature fulfillment company.

800.735.3237
[email protected]
www.smartlead.com

AdTrack

Since 1981, Fortune 500 companies with complex sales or dealer distribution systems have relied on AdTrack to simplify the Herculean task of managing thousands of leads from multiple sources. AdTrack smoothly and seamlessly manages the lead process from the moment the leads are generated until they are distributed to sales people or channel partners.

Our services and tools provide complete lead process visibility, tracking, integrated sales force automation, fulfillment, data analysis and marketing ROI.

The AdTrack Corporation
6060 Huntington Ct. NE
Cedar Rapids, IA 52402
(800) 735-3237
[email protected]
www.smartlead.com

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