Statistics show that around 90% of web users now look at reviews before making a purchase. With the experiences and opinions of others becoming increasingly influential in the decision-making process, it has never been more important for businesses to try and capitalise on the influence of loyal customers and referrals. If you manage a subscription company, and you’re looking to gain new customers, one of the best ways to extend your reach and convert leads is to encourage existing subscribers to champion your service and recommend it to their nearest and dearest. If you’re on a mission to boost customer numbers through referrals, here’s an informative guide to get you started.
The benefits of referrals
Referral marketing is not a new ploy, but it has become increasingly powerful as we spend more time online and information about customer service, features and products is more readily available. Referrals usually aim to encourage customers, clients or followers to recommend a business or a specific product or service to somebody they know in the hope that they will then book an appointment, reserve a table, like a page on social media or buy a product. With subscription businesses, the objective is slightly different. The goal is to urge your subscriber to recommend your company to a friend so that they then sign up and become a subscriber themselves. In many ways, today’s referrals offer a modern take on word of mouth, and they play a critical role in contributing to an individual choosing one business over another.
Referrals are beneficial for many reasons. These include:
A potential customer is more likely to trust the recommendation of somebody they know than a user they’ve never heard of before. According to Hubspot, more than 83% of us rely on suggestions from friends and family to make decisions when purchasing products.
Using referral marketing can be more cost-effective than trying to acquire new customers who have no knowledge or experience of the subscription service.
The quality of leads is high, as there is a good chance that a subscriber will refer your company to somebody who has already shown an interest in the services or applications you provide. The higher the quality of the lead, the better the chances of conversion. Research conducted by Neilsen shows that people are 4 times more likely to buy a product that has been recommended by a friend.
Referral tips and ideas for your subscription business
If you have subscribers that are delighted with the services, features, apps or products you provide as part of their subscription, it makes sense to capitalise on their enthusiasm to try and grow your business. The subscription economy is expanding all the time, and with many people taking ideas and comments shared by loved ones on board, businesses have a great opportunity to attract new customers and appease existing subscribers simultaneously.
To make referrals work within subscription business management, there are several key factors to consider:
Choosing suitable rewards and incentives: subscription businesses are different to other companies, and they rely on satisfying customers on a continual, long-term basis. To encourage your subscribers to refer a friend, it’s important to make sure that you offer rewards that are likely to appeal to them, as well as to your potential new subscriber. Discounts on renewals, automatic upgrades or early access to new features are likely to be appealing. If you refer a friend with Typeform, for example, you get 10% off the Pro and Pro+ packages when a friend joins and upgrades from the Basic subscription to the Pro or Pro+ bundle, and your friend also gets 10% off.
Making the process simple: very few people have the time and energy to embark upon a convoluted referral program, which takes them ages to achieve their objective. As a business owner, you want to ensure that it’s easy and hassle-free to join a refer-a-friend scheme. Webflow, a design and hosting platform, includes personalised referral links, which can be shared via social media, in subscriber emails.
Striking while the iron is hot: most of us would only consider asking our boss for a pay rise following a particularly great piece of work or a commendation of some kind. It would be unwise to broach the subject after a warning or poor result. With subscription referrals, the same rules apply. Strike while the iron is hot, and take advantage of positive feedback and rave reviews. If you’re got subscribers giving you praise, contact them and ask them to spread the word. Sending a friendly, personalised email with the offer of a reward or a treat for sharing links with friends and colleagues is a great way to boost customer engagement at the same time as expanding your subscriber base.
Issuing gentle reminders: many of us are guilty of saying we’ll do something and then forgetting about it. If you have subscribers who have promised to recommend your service and refer you to friends, keep reminding them. Don’t employ aggressive tactics or bombard them with emails. Simply refresh their memory from time to time.
Recognising the link between loyalty and advocacy: your loyal subscribers are most likely to recommend you to others. It’s beneficial to recognise the connection between loyalty and advocacy and to target those who have been with you for the longest period of time to encourage them to refer friends and enjoy rewards in return.
More and more people rely on their friends, neighbours, colleagues and relatives to recommend products and services. Referral marketing can be incredibly valuable for subscription businesses, especially those looking to attract new customers. Make it worth your customer’s while to recommend you to their nearest and dearest, offer incentives that are relevant to the service and the target buyer and make sure the referral process is seamless, quick and simple.
Use feedback from subscribers to your advantage and encourage those who have taken the time to leave positive reviews to get their friends and family on board. With an effective referral programme, which benefits all parties involved, you can turn a single subscriber into a whole network of customers.