Referral Program
Over the summer in 2017, Dreamstyle Remodeling sent me to a home improvement marketing conference in California to educate myself with the latest trends and developments in our industry. While we were already active and prospering with a majority of techniques, one channel of revenue that caught my attention was referral marketing. Quite a few of the companies at the conference had some sort of referral program in place which contributed 1-2% to their annual net revenue.
Did you know?
77% of consumers are more likely to purchase a product when learning about it from friends or family
More than 50% of people are likely to give a referral if offered an incentive
Referral marketing generates 3-5x higher conversion rates than any other channel
Referred customers are more loyal, will spend more, and are more likely to refer additional customers to you brand
Over the coming months I went through various iterations and ideas for a Referral Program that Dreamstyle would employ company-wide. It was important to consider what an appropriate payout was to not only the customer(s) referring each other, but also the employee that we wanted to incentivize to generate the referral in the first place. Some of the decisions that were made involved a mailing versus in-person, was a website necessary, how would the information be presented, and more.
After working with our Marketing Director for a few months and developing out various approaches, I landed on a process that I believed would result in optimal referrals while still keeping KPIs in line. We would prompt employees to seek out referrals by offering a bonus if the referral demoed or sold, with the demo amount being less than the sold amount. The customer referring someone to us would receive a bonus if their referral sold. This method would (1) incentivize employees to generate referrals, because they would still get paid even if the referral didn’t sell and (2) we wouldn’t incur any risk of paying out the customer unless their referral sold, in which case our ROI would be well justified.
After the details were ironed out, I went to work developing creative with our graphics team as well as putting together a presentation webinar for our general managers to then spread the information down the ladder. Additionally, a website was made but we quickly determined that we weren’t seeing any traffic, mainly because the second our sales rep or installer left the home, the odds of a customer submitting a referral dropped significantly.
After collecting this new insight, we spent less time attempting to get the customer to visit a website to fill out information and more time coaching our sales reps and installers to ask for a referral while they were in the home. We created new material to use while face-to-face with the customer that ended up performing much better than the website ever did.
Data and collateral for this program is proprietary and cannot be disclosed.