4 Common Referral Marketing Mistakes That Ruin Your Campaigns

referral marketing

Mistakes are a part of life. We stand and fall as children to learn how to walk. And as we go through life, there are mistakes we make here and there that we learn from. To err is human they say. 

But when it comes to business some mistakes can set your company back in thousands/millions of dollars and ultimately bring your brand to a halt. So you’d want to avoid errors that can cause major financial damage to your business because some of the effects are irreversible. 

And one marketing strategy that’s easily susceptible to errors is referral marketing. 

Don’t be mistaken, a referral marketing program is a powerful way to acquire new customers and skyrocket sales as customers are 4 times more likely to purchase a product or service that is recommended to them by family or friends than if they simply saw an AD. 

However, if you’re looking for the “4 times effect” then you need to have a look at the common mistakes that you’ll likely make if you’re not aware of them and how to avoid them. 

These referral marketing mistakes we’ll look at below will cost you time and money which if you’re seeking to build a powerful brand you have neither to spare. 

1# Choosing Poor Incentives 

To build a profitable referral program, you have to make the rewards appealing enough for customers to take their time to sign up for the program, and then promote it to refer leads to your business. 

But can this be done without spending adequately to ensure that your referral marketing program offers a quality incentive? 

A big no. One of the most common mistakes in referral marketing from companies whether big brands or struggling e-commerce platforms is the attempt to save a few dollars as they try to tempt customers with poor, unrelatable incentives. 

get google ranking ad

Think about it. Would you spend hours of your time trying to gain leads for a company that’s going to reward you with a free branded pen or a promotional mug? 

The excitement that referral marketing programs with such lackluster incentives can generate is next to nothing. 

What Do You Do? Give your customers what they’re looking for. Ensure your rewards are relatable to your brand and worth the time customers invest in promoting your products or services. 

Take, for example, the e-commerce luxury item brand Amuze referral program that offers customers and their friends $25 off their next flash sale buy. 

Amuze referral program

Image Source: No Attribution Required

The great thing about the program is that it drives the prices of the brand’s item down and this pulls in more customers in return. 

Plus the incentive is exactly what an online shopper would be interested in, who wouldn’t want a discount on luxury items? Here is an article that offers more tips on how to market products and services in Singapore. 

get google ranking ad

2# Complicating Your Referral Program 

Data reveals that the average web page visit is just under a minute and people spend 15 to 20 seconds reading each email. This implies that you only have a few seconds to pass the details of your referral program across to your customers. 

 If you take longer to explain what your program is all about, you can almost be certain of a “bounce” back from visitors. The bounce happens because web users do not have the patience for lengthy explanations and a large block of text turns readers off. 

Also, if your referral program seems too complex for the customers’ mind to comprehend, you’ll raise the scam alert as it will seem that you have some hidden clause in the aspect of rewards. 

Large blocks of text leave your customers wondering if they’re being swindled and once your customers get suspicious about your intentions you’re most likely not going to have them referring your product to their friends. 

What Do You Do? Keep it plain and as simple as possible. Your program should be clear at first glance and shouldn’t have to be read over and over again before readers can grasp what their gain is in referring people to your offers. 

get google ranking ad

A perfect example of a plain program is Fotofly’s loyalty program

Fotofly referral program

Image Source: No Attribution Required

The photography brand offers customers a free photograph session after every five sessions. While this is for a loyalty program, the emphasis is on clarity.

Customers know exactly what to expect and when to expect it without breaking a sweat trying to understand it. 

3# Attempting to Set & Forget 

Your brand’s referral marketing technique is not something that you can put on autopilot. If you want a successful referral program that remains relevant with your customers as trends evolve and change then you’ll need to revamp, review and revisit it on a consistent basis. 

Failing to update your referral program is a major mistake that companies make quite frequently and this usually results in financial issues because you’re literally throwing cash out the window by consistently funding a program that isn’t succeeding in pulling in sales. 

What Do You Do? Right before you get started on your referral program, ensure you have various follow-up strategies for testing and accessing the effectiveness of the program. 

Check out how Airbnb did it. They put in place 6 metrics that helped them track the ongoing success of their program. With this approach, Airbnb was able to keep every stakeholder aware of happenings involving the program and ensured that the program was working as expected. 

4# Ignoring the Time Factor 

You did your research and everything seems to be in place, yet your referral program isn’t bringing in the millions you hoped for so you decide to throw in the towel. 

That’s a wrong approach to referral marketing. The fact is that seeing the results you dreamed about and worked towards, takes time. 

Regardless of what marketing technique you’re using, whether you’re working with email marketing or you’ve just started a basic campaign to boost your click-through rates, every marketing program needs ample time to solidify. 

Remain consistent in your approach, review, and revamp your program and simply refuse to give up. 

What Do You Do? Do not expect referral programs to be a magic fix that will patch up all leaks in your business immediately. Rather view it as an ongoing strategy that’ll offer your brand a steady inflow of new customers. 

Conclusion 

Here’s a recap. To ensure that you build a successful referral program, you must avoid offering poor incentives, a complicated program, setting and forgetting and ignoring the time factor. 

As much as possible try to avoid the above mistakes and your referral program is sure to succeed. So go out there and put what you’ve just learned to work! 

Get in touch for more tips about referral marketing and digital marketing in Singapore. 

Author Bio

Tom Koh is widely recognised as a leading SEO consultant in Asia who has worked to transform the online visibility of the leading organisations such as SingTel, Capitaland, Maybank, P&G, WWF, etc. Recently he was instrumental in consulting for a New York-based US$30B fund in an US$4Bn acquisition. Tom is a Computational Science graduate of the National University of Singapore. In his free time he performs pro-bono community work and traveling.
Google+

February 03, 2020

Leave a Reply

Your email address will not be published. Required fields are marked *

Get FREE Website & Digital Marketing Quote Today!

Go top
close-link
close-link