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5 reasons your customer referrals are failing

Customer referral programmes in the Business-to-Consumer space can be one of two things: incredibly successful or dead in the water.

There is no middle ground. A brand either gets it spot on, growing their brand with one referral after another or, a brand gets it so wrong that the referral programme ends up damaging their business.

Like many of us I’m inundated with referral requests from companies that I buy products or services from. But here’s the rub: the majority of them don’t get my attention because they are ill-timed and poorly constructed. The very small number that do, I am still enjoying a fruitful relationship with.

A study by The Wharton School of Business found that done right, a referred customer is 18% more likely to stay with a company over time than an off-the-street customer.

So why are brands still getting customer referrals so wrong? Let me highlight where I think the problems lay.

It’s too complicated

The one thing that puts me off is when the whole process of getting to what I want is too complicated and drawn out. If you’re asking me to open up my network to you then perhaps it would a good idea to respect my time. If there are too many buttons to press, too many details to fill in then you can be sure any enthusiasm I may have had for promoting your brand will quickly dissipate. Give me message options I can tailor, with preferably a one-step referral process – in other words make my life easier!

Being Overzealous

I understand the importance of call to actions but there is a difference between cajoling and encouraging further customer engagement, and coming across as desperate. Why must I ask my contacts if they want to use such-and-such service and why ‘now’ or within the next 5 days? Can’t I ask them next week or the week after? And those emails that tell me how much contacts must spend and by when, are also a turn off.

There’s No Real Value

It stands out a mile and is the main reason why customer referrals programmes fail. As a brand, how much do you know about your customers? What is it that appeals to them and their circle? What would they value?

The common assumption is that money talks. It may do in some circles but it might also be that a customer, like me, would appreciate an upgrade to a premium service or a few months’ extra service for free or at a reduced cost.

Also, how about not sending me those infuriating emails inviting me to contact my circle to get them to join a programme or other for a better deal than the one I am getting, as a current customer. Really? Not so much a customer referral programme, more a shed-your-customers-so-fast-that-you-wonder-where-you-went-wrong.

The timing sucks!

Just because I’ve recently purchased your product or service doesn’t mean that I’m going to recommend someone to you straight away. Wait for us to build a positive relationship where you prove yourself as a brand that consistently delivers on its service promise, one that I am prepared to recommend to my circle. And don’t ask me to refer you to friends immediately after a customer service call with your contact centre, because you’re going to be swiftly dumped into the ‘opportunist’ category. Whilst I accept there isn’t a formula for the ‘right time’ to ask for a referral, it certainly doesn’t make sense to do it very early in the relationship. Patience!

My Brand is as Important as Your Brand

There can be a certain air of arrogance about the ‘big boys’. They assume that because they are a household brand that customers will automatically want to be associated with them.

Let’s consider this argument for a moment: it has taken time, energy, commitment and passion to grow my personal brand to where it is today. I look after it because without it, my world would be a poorer place.

So why would I want to ‘sell’ my contacts to a brand of which customer opinion is so low? Not even for cold, hard cash would I want to associate my personal brand with a corporate brand that is notorious for not only getting it wrong, but getting wrong time and again. You’re better off investing your time and money in getting your house in order first.

In Summary

Customer referral programmes need to have value, they need to be timed well, they need to be based on hard data and frankly, your brand needs to be worth referring to people. A great example of customer referral programme that ticks all these boxes is that of Uber. Their referral process delivers real value to both existing customers and the people they refer, is extremely simple without any unreasonable time pressures and can be completed in 2 clicks.

If you’ve got any insights into successful customer referral programmes then, as ever, I’d love to hear from you.

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