10 Reasons Referral Programs Fail

Published by Arlen Robinson [Guest] on December 9, 2020

Guest Post by Arlen Robinson from OSI Affiliate Software.

You don’t need to buy the best Shopify course to promote a Shopify store for any eCommerce website. You need to know how to create a referral program.

Referral programs are attractive for it leverages your customers as your team of marketers. With them by your side, you’ll have a team who will promote your products and services to their family and friends. Even though it is known to be effective, it is still not a surefire way to generate traffic to your website. You still need to know the factors that you should avoid.

Today, you’ll learn the top 10 factors that make referral programs fail so that you can avoid them once you see them.

1. Wrong Reward

One of the surefire ways to make your referral program fail is to choose the wrong reward. You see, you need to choose your reward based on the preferences of your target market. If you choose a reward only because it is cheap and easy to give away, you may not get the attention you hope to get. So how will you know that you have chosen the right reward? That’s simple. It would help if you asked your audience about it. You can ask them about the type of reward that they want and give that.

2. Rewarding Only One Actor

Every referral program has two actors. The referrer is the one who is in charge of advertising your program. He invites his family and friends into your program. The friend is the person who signs up. He can belong to the family or friend circle of the referrer. It is a custom only to reward the referrer in a typical referral program. But you can also choose to reward a friend. By doing that action, you can also motivate both of them to participate in your program actively.

3.  Not Promoting Your Referral Program

You cannot just create a referral program and expect it to attract customers to your website magically. You also have to do your part and advertise it. The process is not that complicated. First, you can advertise your referral program on your website. You can have a link to the referral page right from your homepage.

4. Promoting Your Referral Program Once

Even if you have chosen to promote your referral program, you cannot do it once. If you have tried promoting your referral program to your list, you’ll know that it is hard enough to do it once. You have to continually remind your customers and inform your future customers that your referral program exists and they can participate in it if they want. And you can only do that if you continuously promote your program.

5. Promoting Your Program to the Wrong People

It is the basic rule of marketing to know your target market. If you don’t know your market, you will not convince them to work with you. It is also the same for your referral program. You need to know who you are targeting before you even create it.

6. Not Leveraging Influencers

Did you know that a referral program is a fantastic way to attract influencers? Referral programs are more than just programs in your business. You can also use it to convince other people to promote your business. You can use it to convince influencers to promote your business. How can you do that? You can do it by creating an exclusive referral program made for their target market. This is a surefire way to get their attention and get them to say yes to promote your business.

7. Seeing Referral Marketing as Your Only Form of Marketing

Referral programs are useful by themselves. But it is more effective if it is done with other marketing methods. So once you have chosen that, you will implement a referral program in your business. You also have to consider having other marketing methods. It can boost your referral program and make it so much more effective in driving more traffic and sales. Why do you have to do this? Well, you need a system that drives traffic to your site. The referral program is in charge of conversion, but you still need other marketing methods for the initial traffic.

8. Not Learning from Other Referral Programs

You may need to look at other referral program examples to learn from their experience. So if you are selling a particular product, you may want to look at websites that successfully implement a referral program. Learn from top-performing,  referral programs from the likes of Dropbox, Airbnb, Paypal, etc.

9. Not Using Software

These days, you can easily set up a referral program with software. It is suggested that you do this to no longer have to go through the trouble of manually encoding your leads into a spreadsheet. With software, the entire process is automated. From capturing leads to tracking their performance, all of these things can be captured in a dashboard.

10. Not Tracking Results

With software, you can see all the metrics about your referral program. It can help you track the overall results of your referral program. It is always a good habit to track your results. You need to be able to see how your website is performing before you implement your referral campaign.

Now that you know the different factors that make a referral program fail, it is now easier to avoid them. You can make a quick rundown of this list to see if you are committing one of these mistakes. If you do, don’t fret. It is never too late to correct them. Even if you have already implemented your referral program, you can still correct it if you follow this article.

Also, you don’t have to be afraid of failure. Failure is necessary for success. If you commit one of these, it gives you an idea of what not to do in the future. And that is not a waste of time or effort. It is not lost. There is only a new lesson learned.