“Word of mouth.” It’s a business owner’s dream come true — but how do you stimulate it?
Most business owners love referrals.
Especially business owners who aren’t dyed-in-the-wool direct marketers or salespeople.
Maybe I shouldn’t reveal why. But I’m going to anyway. Then, I’ll share a really effective way to get your best customers talking about you — as long as you deliver a great product!
So — why do business owners love referrals? It’s because they hate to sell. Since the vast majority of business owners would rather be craftspeople than salespeople, they want the selling to happen without them touching it. Also, if you’re mindset is that of the craftsperson, a referral is a hugely validating ego stroke. Your customer loved you enough to tell their friend to buy from you.
This isn’t right or wrong. I’m just calling it like I see it.
I love “word of mouth” too. And yet — it has a major downside: it’s hard to control.
Yes, you can work on delivering a stellar service. You can really up your game in terms of customer experience. And these things do really support word of mouth or referrals.
But they don’t come automatically. And often, they trickle in. Rather than coming in the deluge most businesses would like to see.
What if there were a strategy where you could motivate your best customers to want to talk about you more? To share their experience with their friends… To specifically call their friends to action — to send them your way?
This just might be a way…
How to use the “ethical bribe” growth hack to turn your happy customers into evangelists…
Before I dive into these examples, I do want to call out one big concern that I know will be raised.
The ethics of paying customers to send people your way.
What you’re about to see are two examples of where companies have specifically offered a financial reward for any completed referrals (the referred party becomes a customer).
In some circles, this is seen as unethical.
I think that’s head trash.
There’s nothing wrong with hoping for word of mouth to come for free. But there’s nothing ethically wrong if you’re completely honest about the terms of a paid referral, either.
What you’re doing is giving customers who already like you and would talk about you an extra incentive to share their experience.
By adding this as a mechanism of your product or service delivery, you’re…
— Reminding them that you value their referrals…
— Giving them that little nudge that it might take to get them to actually do it…
Sure, it’s more “pure” — for what that’s worth — if the referral is free and without obligation. But ultimately if you’re looking for business growth, you probably want to decide on the most effective strategy.
On to my examples, from my personal experience…
Ting: A new kind of mobile phone carrier…
I regularly listen to Dan Carlin’s Hardcore History and Common Sense podcasts. At least, as regularly as he releases them. They are at least in part funded by ads. And for a while, nearly every podcast included a Ting ad.
Around the same time, I was looking for a new cell phone carrier. I was on Sprint, but out of my contract, and looking for something competitive.
So I looked into Ting, and their “mobile that makes sense” promise.
They charge based on usage. They promise (and fulfill) that when you call for support, you get a human — and no phone tree.
They don’t gouge you on subsidized phones. You buy a device at retail price, and it’s not included in your bill — so you don’t pay for it twice-over (or more) like you do in most carriers’ contracts.
They offer a calculator on their website, where you can enter up to 5 months’ worth of usage, to see how much you would have paid on Ting. About 90% of users save money (everybody but those who NEED unlimited data plans) — the average per-device bill at Ting is $23/month.
And, they operate on the Sprint and T-Mobile networks. Since I was switching from Sprint, that meant I could get the exact same service for a lot less per month.
It took me a bit, but I eventually switched to Ting (being careful to use Dan Carlin’s code to support his podcast!).
And I’ve been totally happy with the service.
In fact, when a friend was complaining about AT&T on Facebook, I recommended Ting to him — without any kind of referral fee I could earn (I actually shared the Dan Carlin link — and said it was someone else’s code).
But Ting also has a program for customers.
As a customer, I can offer you $25 savings off each device bought through Ting, or $25 off your first bill. (Since the average bill is $23 per device, that means your first month might be free!)
If you sign up, I get $50 credit for the first referral, and $25 after.
When I sign into my account on their website, it actually offers me the “Refer a friend” bonus, with a link to get my personal referral link. (That page also has Twitter, Facebook, and LinkedIn links — that auto-generate a message with my code built in.)
I get to give you a $25 coupon — and if you take me up on it, I get paid via bill credits, too.
This is like an affiliate program that you automatically join when you become a customer. And it’s a very smart move, too.
If Ting’s cost to acquire a new customer is anything higher than $50 (and I bet it is — by a mile), offering $50 in combined savings for the new customer and the referrer is a great marketing investment for them.
And it rewards both of us. Me, for referring you. You, with savings as you get started as a customer.
I would have never referred anyone to Sprint. I just didn’t love them. But Ting is a pretty dang good mobile service. And since I’m happy to talk about my good customer experience anyway, it’s smart of them to encourage me to do so.
Casper: A dang good mattress…
Likewise, my wife and I were in the market for a new mattress last year. The one we had was well beyond its expected lifespan.
I don’t remember where or when I first heard of Casper. But I know I’ve seen and heard from them many, many times since I first became aware of them.
Their mattress is some proprietary combination of memory foam and 3 other kinds of foam. It’s received rave reviews all over the place, and was listed in Time Magazine’s 25 best inventions of 2015.
Unlike other mattress companies that make a ton of different kinds of mattresses to cater to people who like soft, firm, and whatever else, Casper says…
“Our award-winning mattress is so perfect we only make one.”
You literally just pick a size, and buy it.
And you can’t get Casper in stores. You have to buy online.
Which poses a big problem for beds. Most people want to try out a bed before they buy it. After all, a King-size single mattress is $950 — a hard commitment to make without a test, first!
But Capser recognized it — and in fact, turned it to their advantage with a smart offer.
You really can’t decide if you’re going to sleep comfortably on a mattress with just 5 minutes in a show room, with a over-bearing salesperson staring down at you while you lie there.
So Casper gives you 100 nights to try their mattress, in your home. And if you don’t like it, they will come pick it up free and give you a full refund.
In fact, I heard they donate them to a local charity — which made me like them even more.
So, we tried it.
And, we liked it!
Their 4-layer foam design is both soft and supportive. It helps us sleep better. And it’s super comfortable!
And now that I’m a customer, they let me know they want me to share my story. Like Ting, they built the functionality right into their website.
They automatically give me a link I can share with you. When you click my link, you get $50 instant savings on your Casper mattress. And I get a $50 Amazon gift card.
Again, it’s probably better ROI to pay $100 in savings plus a gift card than getting new customers through paid advertising.
And you feel good for saving $50. And I feel good for referring you plus getting $50.
It’s a great deal all around!
What both of these companies get right — that’s absolutely critical to the success of these programs…
It should not be overlooked that both of these companies deliver great customer experiences.
You can’t get word of mouth and referrals with the mechanism alone.
But once they had nailed down the excellent customer experience, they turned up the growth hacker viral element with these automated programs to encourage referrals.
The savings I can give you make it appealing for you to use my link, rather than looking up the company on your own. The money I get if you become a customer makes it more appealing for me to mention them — and share them here with you.
And the fact that they built it into the customer experience and promote it (rather than making it something you have to do the extra work of signing up for) makes it all the more likely that people who wouldn’t normally pursue these things will follow through with them.
It’s only because they do ALL of these things right that these programs are such good examples.
Any chance you can make a similar program work for you?
Yours for bigger breakthroughs,
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