07.11.2017

There’s no reason to reinvent the wheel to drum up sales and find new members for your community. Turning to your existing community members for referrals can help get new people in front of your products and services. After all, loyal community members are likely to be your strongest brand advocates, and their own success can help provide meaning and context for new customers.

There’s also research to back up the idea of encouraging communities to refer new clients. Word-of-mouth recommendations influence 80% of customer decisions. And according to the Wharton School of Business, 83% of satisfied customers say they are willing to refer products or services. Yet at the same time, only 29% ultimately do. So don’t assume satisfied community members will happily spread the word for you. Your community and customers need a path, incentive or more context on how to actually refer others.

One way to entice more referrals is to set up a program to help streamline your business. A referral program can also help improve the lifetime value of your future customers, which can be significant. According to Influitive, 69% of companies with referral programs report that their deals close faster than those without, and 59% report a higher customer lifetime value.

Your own program could take the shape of a community incentive, like a competition attached to a reward, or a structured referral program run through a third-party tool. Whichever method you choose, just make sure it fits with the spirit and integrity of your community. In other words, don’t force-feed referral requests, or ask a design community to pick up the phone and ask people to use your T-shirt design business.

Need inspiration to kick your own referrals into high gear? Take a closer look at five ways to encourage referrals from existing community members and watch the word spread.

1. Turn It into a Competition

Create a thrill for your community by running a competition with coveted prizes to help spread the word and encourage more referrals. Threadless mastered the community-driven competition model and built an entire business around it. Their community submits original designs and the Threadless community votes on their favorites. Only the best designs are printed and sold on the site.

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Threadless

To kickstart their exposure, founder Jake Nickell spent lots of time leaving comments on blogs and chatting with followers to help engage the community and spread the word. And while Threadless offers designers royalties, gift cards and cash, they rely heavily on organic word-of-mouth referrals about their contests. Members are naturally vested in getting their friends, family and network to vote on their designs to win prizes.

As community members post designs and ask their network for votes, an organic referral process builds and entices new members to submit designs. The process is cyclical, and the Threadless community continues to build itself.

2. Create a Share-Worthy Experience

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Massroots rallies its passionate cannabis community to help change the face of the industry. Their community successfully lobbied Apple to reinstate a cannabis app, attends political rallies to help change laws, and garners attention for their cause. Their blog also curates some interesting marijuana-inspired content.

A blog post on “How to Prepare a Cannabis Infused Meal” resembles the look and feel of a high-end foodie article. The quality of their content gives users a reason to share on social media and start up a conversation. Another post details how to plan the perfect cannabis wedding that delights guests and keeps it classy.

Massroots also fosters community referrals by showering their current members with gifts and merchandise that can be worn and seen by everyone. This is particularly important when attending high-profile events like rallies to get the word out. As a result, more cannabis supporters see the mobilizing community and want to become a part of it.

Massroots doesn’t take itself too seriously, and makes sure its community has fun. Although its social media channels are peppered with motivational content for activists pushing for cannabis legalization, or information on how smoking pot can help cancer patients, there are also plenty of riffs on the stereotypical pothead. The Izzy Blaze Show educates cannabis lovers on things like “Rolling Up a Quarter Ounce Blunt” and “How to Smoke Weed with Fruit.” The fun, spirited videos give their community something to consume and pass on to their own networks.

3. Create Greater Value

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Nextdoor

The neighborhood-driven website Nextdoor offers an old-school approach to getting to know your neighbors with a modern twist. Nextdoor relies on neighbors from specific areas joining the site, swapping stories and advice, talking about issues in the community and posting classifieds and events.

The individual Nextdoor websites are nearly 150,000 strong, and cater to different communities across the country. The websites are private, and users are required to verify their identity and home address before participating. The system creates a safe space to talk and communicate about local issues, and users can actually know who they’re talking to. Ultimately, verifying identities makes sure the Nextdoor community is authentic and builds value.

Nextdoor’s websites are most useful to the community when more neighbors join in and support each other. As a user is signing up, the site prompts them with tips to invite more neighbors, and also gives easy options for clicking and searching their email contacts to invite neighbors that way. Nextdoor also offers a $25 Amazon gift card incentive: if a member refers a friend, who in turn successfully starts a new Nextdoor neighborhood website (by launching their Nextdoor neighborhood with 10 verified members), both member and friend will receive a gift card.

4. Personalize the Experience

Advertising, marketing and public relations firm Industrium worked with a trucking and logistics company to figure out how to retain more of their truck drivers and get referrals. This proved especially tough in the trucking industry, where the major players offer the same general salary and benefits. But what Industrium found really retained workers and spread the word was the personal side of the company.

Their trucking client brought in real drivers to recruiting events and conferences to talk about their work experiences. In one instance, the trucking company permitted a driver to “deadhead” (drive an empty truck) across the country just to get home in time for Christmas. In the end, the company found that attendees wanted to talk most with the actual truck drivers, as opposed to the recruiters.

This experience isn’t unique, and can be replicated by other industries. Ziprecruiter suggests holding open houses at your business so your network can see more of what you do, ask questions and take tours led by star employees who want to talk more about the company. Ultimately, the idea is to empower your community to tell their stories about how your business impacts them and has made their life better.

5. Give Your Community the Right Tools to Refer Others

Your community may need more than just contests, personal stories or a high-profile cause to get into referral mode. They may also benefit from third party-tools and a clearly defined structure on how to successfully refer others. Start by designing a referral incentive program that clearly details how to refer others and any incentives attached. For example, a successful referral could lead to free merchandise, discounts or part of the resulting profit.

RewardStream

It is possible to manage a program on your own, but it probably won’t scale very well without the proper tools to stay organized and keep it all running. One option is to use a referral app that integrates with your existing platform. E-commerce stores, credit unions and service providers use RewardStream to get set up with a referral program that rewards people for spreading the word and generating more sales. The app generates personal referral links that customers can pass on in exchange for a coupon or incentive for your store or service.

After struggling with referrals, Boost Mobile tapped RewardStream to increase their referrals by 900%. Their previous referral model required generating a 16-digit code for customers who wanted to refer Boost Mobile, which left those customers frustrated by the experience – and they rarely followed through. RewardStream offered an easy customer experience and interface, a real-time reporting dashboard, and ultimately resulted in 15x more conversions. As more referrals converted to customers, the referrers earned discounts, gifts and service benefits which sparked higher satisfaction and a transition into Boost Mobile brand advocates.

Conclusion

A satisfied community can help shape the future of your business by driving more high-quality and relevant referrals. But first, your business needs to actually empower your community for success. Give them the tools to succeed, whether that’s with a referral app, a contest and prizes or contributing to a high-profile cause. The easier you make it for your community to actually refer others and promote, the higher your chances are for success.

What are some of the ways you encourage referrals from existing community members? Let us know by leaving a comment below:

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Carrie Melissa Jones

Carrie Melissa Jones | @caremjo

Carrie is the COO and Founding Partner of CMX. She has built community at Chegg and Scribd and has consulted with community companies around the world. She lives in Seattle, WA with her pup, Bruce Wayne.