Maximizing your referral programs’ profitability
Referral programs are functioning based on the word of mouth principle. Good word of mouth can happen to a business in a natural way. However, it is far more productive to plan the referrals.
Defining the objectives of a referral campaign
There are several general objectives for a referral program:
- Attracting new, real and active users to your booking app;
- Promoting your booking app among a specific group of people;
- Raising the loyalty level of your customers;
- Building up a database of active clients;
- Raising your “repeat purchase” rate;
- Re-engaging your passive customers.
In order to succeed, define and prioritize your goals for each referral program as detailed as possible.
Try basic SMART-analysis. Remember: characteristics of the target group of your marketing campaign matter most. It’s essential to know:
- Who are the people you want to reach with your program?
- What is the motivation for people to refer your service to their friends?
- What will be the best way and time to ask for a referral?
- What are you giving people for their recommendations?
- How much are you willing to spend on it?
- While setting up a referral campaign to market your taxi business, you need to keep in mind the only costs you will make are the costs of the actually redeemed coupons.
This means, on one hand, that you do not pay for the only fact you have a referral program. On the other hand, it’s still essential to estimate the optimal budget for it.
Join our next lesson on the budget estimation!