Future Rewards vs Immediate Incentives

One of the keys to getting customers to refer friends to a business or an organization is to provide an attractive incentive—the proverbial carrot. What constituents “attractive” will vary greatly, depending on your market and demographics of your customers, among other factors.

From the perspective of the business, there is often a strong tendency to demand that referred individuals take the desired action before an incentive is distributed to the customer who provided the lead. In other words, only if one of those referred becomes a paying client will the business confer upon the original customer the incentive.  Indeed, this is how most SaaS ecommerce referral systems, such Referral Rock and Referral Candy as  are set-up to function. This is type of delayed incentive can be termed more accurately as a “reward.”  This makes great sense from the business’ point of view.

However, it is less appealing to the customer who is asked to take action now for a potential payoff in the future.  In fact, numerous psychological studies have illustrated that most of us prefer a reward that arrives sooner rather than later. It turns out that humans are quick to discount the value of a later reward. One study showed, for example, that people would prefer to receive $50 immediately rather than $100 in six months time.  What’s more, the longer the delay, the greater each of us discounts the reward’s value.

While the possibility of receiving a future reward can certainly motivate people to act, such individuals need a developed capacity for delaying gratification. Customers also must accept that they cannot control the actions of their referred friends, a fact which may lead them to further discount the perceived value of a future reward. These two factors—delayed gratification as well as the possibility that no reward will be forthcoming—can convince a customer that the actual effort involved is not worth the potential reward. All online shops using automated referral systems are impacted by these two negative influences.

In-person (or “offline”) businesses can try a different approach to referral rewards since transactions include personal interaction between buyer and seller.  That approach is to use “immediate incentives.”

Immediate incentives reverses the logic of referrals—the business provides an incentive now for a potential payoff to the business in the future.  The focus becomes the present act of referring, which the customer fully controls, instead of the future potential action of other people which the customer does not control and cannot monitor.  Incentives provided on-the-spot not only taps into a customer’s deep-seated desire for immediate gratification, it also frees them from nagging thoughts about following-up with your company to get what they may be due. In short, from the customer point of view, an immediate incentive is sure to be more attractive than offering a potential future reward.

The key for each business is to find the right immediate incentive.  Armed with the knowledge that we are psychologically hard-wired to value “less now” over “more later,” your business should experiment with modest incentives that have value in they eyes of your customers yet that won’t break the bank. (We’ll look at various types of incentives in an upcoming blog entry. Stay tuned.) The other point to keep in mind is that you will likely generate more referrals by offering immediate incentives, and those individuals are important leads for the future of your company, today and tomorrow.

Grand Opening Events & Referral Marketing

New business owners face a lot of challenges. There’s developing the concept, garnering the human and financial resources to make it a reality and then actually implementing the plan. Simple, right? Oh, and then there’s ensuring that your company doesn’t fail. The odds are daunting. According to the Small Business Association, 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. These pessimistic facts point to the need to continually innovate and invest in your business when it is already up and running just as you did in the initial stages. But to get your business up and running in the first place, you’ll need a Grand Opening that will launch your business into orbit at a quick enough pace so that it doesn’t come crashing back down to earth!

There’s a lot of useful material online about how to create a Grand Opening event that creates the awareness and builds excitement about your business. There’s a lot to keep in mind, but when you craft your event as carefully as you have your business, it is sure to be a success.

One key goal of the Grand Opening is to build relationships, and relationships are built in-person and through networking. Successful marketing events of all types, and Grand Openings in particular, offer a way for attendees, customers and potential customers to leave their contact information. Super successful marketers go one step further and garner referrals from everyone they can since friends of attendees give your the extra edge for growing awareness and interest in your new endeavor.

BUT! The Grand Opening is not a one-and-done event. It is advantageous to consider your Grand Opening as an all-out effort lasting between 3 and 12 months. Only after going through part or all of the annual cycle will you learn the ebb and flow of the business and garner the strategic insights that will allow you to succeed in the coming years. You are also likely experience the full variety of customers and most will be new customers during that period of time. Customers who view your business as “new” are likely to be more excited about it, and you should certainly try to capitalize on that excitement by asking them to share information about your business with friends.

Therefore, it is important to ask for referrals. While some customers may share your business information through social media, why not ask them to think about 3 – 5 specific people they know that they think would like to know about you?  By using a platform like ShareSomeFriends, customers send friends a promotional message that you have crafted, taking all the effort out of the process. More important is the fact that the recipients will see a message from a trusted friend about your business and will be more likely to stop by.

Getting Grand Opening referrals, and nurturing these perspective customers will help turn your business into a success!

4 Secrets to Getting Referrals in the Financial Services Industry

Nearly all businesses live by referrals. Whether its simple word of mouth or sophisticated sharing systems, humans are social animals and we share the world we encounter with those around us. The hard part is to find a systematic method that helps you get referrals but that doesn’t feel systematic or intrusive to the consumer.

I had an enlightening conversation with a senior leader in the Financial Services industry recently. With over 40 years in the business, he knew a thing or two about referrals since, over the decades, he has requested and received them from satisfied clients and they remain a key source of his success. He outlined the evolution of referrals within the industry and I thought I’d share some insights and ideas in getting lucrative referrals.

1. The 3 P’s: Pen, Paper & Prompting

The very basics of getting a referral is asking a current customer to provide one, or more. Pretty simple and straightforward. But the industry executive I interviewed indicated that there’s more to it than pulling out a pen and paper. The fact is that even the most satisfied and willing clients often would indicate that they didn’t really know someone who could benefit from the same sound financial and advise and astute planning that they had benefited from personally. That’s when the 3rd P — prompting — comes into play. An effective professional will ask, “Do you have any neighbors that you think might benefit from a consultation?” or “Are there co-workers that you think might need some planning advice?” These and other simple questions help to prime the referral pump, and gets customers to consider specific individuals that might be relevant, and ultimately thankful, referrals.

2. Data Mining: Working Social Media Platforms

With the advent of LinkedIn, Facebook and other social media platforms, it appeared that life for referral-seekers got easier. One reason for this is because a financial services professional can research the client’s business and personal connections to identify friends that appear relevant. When meeting with the client, some name-specific prompting can certainly get the referral juices flowing. However it can also make an the customer feel uncomfortable and even stalked — not exactly the feeling one wants to engender in an important client. In addition, many of us have online connections that are not truly friends, so the time needed to blindly research names in advance of the meeting might actually be poorly spent.

3. Let Me Do That For You: The Hard (and Awkward) Way to Get a ‘Prestige’ Referral

Ideally, professionals are after the prestige referral in which a client will do the contacting and subsequent ice-breaking for you. This might come in the form of a call from the client to their friends about your services. Or even an email. But some clients find themselves tongue-tied or a victim of writer’s block and therefore may not be open to this option. To overcome such objections, some financial professionals will write an email for the client so she/he can forward it to their friend. Unfortunately, chasing the prestige referral in this way turns a straightforward and palatable referral request into an byzantine affair in which your key clients are expected to sign-off on a ghost-written email to their friends. Talk about awkward.

4. Mobile Referral App – An Elegant Solution to Getting Prestige Referrals

Even if a client provides you with the names of relevant friends, the next steps can be laborious and ineffective. If the client failed to provide the referral’s phone number, you need to attempt to locate it. Ditto for the person’s email and/or mailing address. Then, there’s the follow-up actions: cold calls, cold emails, and cold snail mail letters, not to mention additional cold follow-up that’s needed if a response is not forthcoming.

Imagine if a simple and affordable mobile app could take care of all the key elements of getting a referral: Prompting, capturing the names, phone numbers and emails of the referrals for follow-up and even allow the client to introduce you to their friends in a way that was simple and non-intrusive.

“Wow, that’d be very interesting, indeed,” said the executive I spoke to said when I introduced the concept of ShareSomeFriends, our new mobile referral app followed by, “How does it work?” Good question! Here’s how:

A) You create a referral campaign on your ShareSomeFriends account which includes crafting a short introductory message. Your clients can edit and then will send this message as an SMS to their friends as a part of the referral process (see below).

B) At your request, clients download the ShareSomeFriends app from the App Store or Google Play and enter in your unique campaign code. The app then presents their phone contact list, prompting them to scroll through it and consider might be a relevant referral

C) Clients select relevant phone contacts to refer and then view and ultimately send the (editable) text message you crafted in the first step. That’s it!

Not only is the process of getting the prestige referral simple and fast, but all the information volunteered in the referral process is captured on your ShareSomeFriends back-end for follow-up (so you can finally dispense the pen and paper).

The”Right” Way?

While clearly there is no “right” way to get the prestige referrals that financial professionals need to grow their client base, a new method that capitalizes on the ubiquitous smartphone might just make ShareSomeFriends with its 14-day free trial worth a shot.

The Uncoventional Convention Kiosk

Let’s consider “conventional” convention kiosk. Clearly, a kiosk is essential. It allows conference goers the ability to sample your offerings, pick up pamphlets, speak with professionals and exchange business cards – and more. Often, fun swag and giveaways are, well, given away, only to end up in the trash bin within hours or by the end of the week.

Depending on the nature of your business and the conference, the metric of success will vary, but usually new business is the goal. The question is whether the event and the kiosk is leveraged to its maximum, that is not only to generate new business with attendees that you meet at your kiosk, but to also leverage your interactions to get referrals. It makes sense that someone willing to do business with you also knows others that could use your services and would be willing to refer them to you if there was a quick and efficient way to do so.

That’s where ShareSomeFriends can make your convention kiosk unconventionally successful!

Here’s a recent example:

A few days ago, one of our clients held an event for 2000 Americans currently participating on an international 8-week professional internship program. At the event were 25 vendors and kiosks.  While this is a promising participant-to-vendor ratio, the catch was that the event lasted only 90 short minutes.

French Macarons. Tough Competition

Further exacerbating the issue was that a large variety of delicious free food, including refreshing drinks and yummy deserts, were served at the same time, so therefore each vendor was desperately vying for the attention of the attendees, some with more success than others.

One kiosk — the ShareSomeFriends booth — provided the ability of these participants to refer friends to participate on a future internship program.  Comparatively, it was minimalist with just one small giveaway —  a $5 Amazon gift card — for those who would be willing to refer their friends.

Referral Kiosk
Quick and easy. Interns refer their friends directly from their phone within seconds!

The results?  Within the hour and half, over 4500 unique referral leads were generated through the ShareSomeFriends platform.

At what cost? The total cost of the incentives distributed came to $830, meaning the cost per lead was just 18 cents!

50 leads a minute x 90 minutes at 18 cents a lead. Not bad.

What did our client get for 18 cents per lead? Each person referred received the program’s promotional message sent via SMS. More importantly, however, is that they also acquired a high-quality, customer-vetted list of 4500 potential new customers, replete with contact information. They can now follow up both through direct outreach and by creating custom audiences to serve them ads through Google and Facebook, and grow their future programs.

Referral app for conventions
Referral leads by the thousands. Once attendees heard about our incentive and how easy it was to refer friends, the kiosk was flooded.

ShareSomeFriends can turn your convention kiosk into an unconventional tool for business growth through referral leads. Since it takes all the hassle out of making referrals, people are willing to refer, and you generate thousands of quality referral leads in minutes!

Reach Referrals Using Custom Audiences

So you’ve recently generated referrals using ShareSomeFriends. Great!  You have scrubbed the list and your team is now working through the qualified leads doing their utmost to turn them into new customers.

The question is: What else can you do?

Answer:  Create a custom audience using the contact information of the referrals gathered to advertise to these new leads via Facebook, Pinterest and Google Adwords .  This is an effective way to ensure your message reaches these potential customers before and after your sales team has made contact. Moreover, once you have a custom audience in any of these platforms, you can create “lookalike” or “similar” audience to serve your ads to a similar demographic.

Creating a custom audience on Facebook is quite easy. In the upper left of the Ads Manager page, click the menu icon and select Audiences. Then click Create Audience > Custom Audience > Customer File > Add customers from your own file or copy and paste data. You can use the cell phone numbers alone as the identifier that will allow Facebook to match the numbers with active accounts. Then you can give the audience a name and hit Next.

Facebook will automatically match those phone numbers with the associated Facebook accounts and you can then create an ad that targets those specific people. What’s more, you can ask Facebook to create a “lookalike” audience based on your new custom audience, a feature that might help you uncover even more business. It just takes a few minutes to create the audience and then you have an effective way to re-market to these leads. There is a minimum audience required of 200 people. Learn more about creating a Custom Audience on Facebook.

By creating a custom audience from your list of referrals, you’ve just amplified the positive impact your direct phone and SMS follow-up methods can have.

The process of creating a custom audience is similar on Pinterest. Here’s a resource article from that platform.

For Google Adwords, read this article. With Adwords, you can also create “similar” audiences which expand your reach!

All of these methods are simple to implement and help you reach your growth goals!