Most businesses, whether they realize it or not, rely on referrals. It’s hard to build a true following on standard marketing alone. You need people out there in the real world to talk about your service to their colleagues, friends, and family. In fact, 74% of consumers said that positive word-of-mouth was very important to them when making a purchasing decision.
The problem is, sometimes your most dedicated customers may be a little shy. Getting them to talk about a service they love isn’t always that simple. That’s why referral programs exist. They incentivize customers to help others sign up by offering a commission, or through other means.
FreeeUp has found great success with its own referral program. It has over 1,000 affiliates, and pays out more than $2,000 a week. I recently interviewed FreeeUp’s co-founder, Connor Gillivan, to put together some of the most important takeaways he learned while helping to build the program.
Have a great product to ask referrals for
Connor explained that once FreeeUp was first launched, they started to quickly see current customers talking about it. They were getting a lot of referrals without ever needing to ask for them. “When we saw this happening,” said Connor, “We were inspired to create a referral program that would further entice our loyal clients to refer others to sign up.”
According to Connor, one of the best ways to know if you’re ready to launch a referral program is that you are already getting a fair number of referrals without offering incentives. If you are not, it may be time to tweak the product or service before you start a program.
Consider an ongoing commission structure
Consider your commission structure. Does it reflect the kind of leads you are getting? For example, it may work great to offer a $20 incentive to refer someone to buy a fancy TV. However, that model doesn’t work as well for a SaaS company with a monthly subscription. You could have an affiliate sign a customer up, only to have that customer cancel the next month.
Connor explained how FreeeUp wanted to do something different: “We decided to create the commission structure so that it was ongoing, $0.50 for every hour billed through a referral.” This made it so that each referral commission was proportional to the growth it brought to the company.
Add real value for your affiliates
On the other side of the coin, the commission structure also promised real value to the affiliates. “Think about it,” said Connor. “If you refer 10 people and they start billing 10 hours per week, that is 100 hours billed. You receive $0.50 for each hour. That’s $50 you earn each week that can be cashed out or used on the workers that you’re hiring. Many of our top clients use their referral earnings to fund workers on their team.”
Make it easy to recruit referrals
One of the biggest wins of the FreeeUp referral program is that it’s very easy to use. While it was a technical challenge to implement, now that it’s up and running, it’s completely automated. Every client or worker that signs up to use FreeeUp receives a unique referral URL to share with people they want to refer to the service. When someone they refer signs up to the platform, they are automatically linked. As the new client begins to bill hours, the referral commissions are sent to whoever referred them.
Be consistent in promoting the program
Connor emphasized the importance of mentioning the referral program at every opportunity. “This is the main lesson that we’ve learned. When new clients sign up, we make sure they have an amazing experience, and then we encourage them to get involved in the referral program. When we are featured on podcasts, we share the program with the hosts and offer them a free trial to give FreeeUp a shot.”
This consistency in promotion has led to great success. More and more clients are signing up every day, many of them through referrals. Connor is confident that the program will continue to grow and further benefit both FreeeUp and its customers.
Emily Bell has worked in digital marketing for seven years, tackling projects for a wide variety of tech and PR companies, as well as a few of Amazon’s top third-party sellers. Her work has appeared in Entrepreneur, Influencive, Addicted2Success, Forbes, and around the web.