10 Best Practices For Launching A Successful Referral Program
What is referral marketing?
What is a referral program?
1. Put customers first
3. Consider referral reward cost
Now that you've chosen a referral reward, the next step is to consider cost vs revenue.
One of the main perks is that you will only pay for a successful referral.
To calculate whether you can break even from your referral reward, consider the average cost of customer acquisition and your customer lifetime value (CLV).
Ideally, referral rewards should cost around 10% to 20% of the value of your product.
If you can't predict the outcome of your referral program (yet), you can start by offering a small incentive. You can then modify your referral program incentives based on the results and revenue you gained from your referral program.
A good tip is to include a minimum purchase amount to ensure that you're still profiting in spite of the referral process.
The Vera Bradley referral program gives advocates and friends 20% off. However, the full-priced purchase of the referred friend must be at least $100 or more to qualify.
4. Design your referral program
6. Have a default sharing message
Launching a successful referral program