Do Refer-A-Friend Programs Work?

It’s all about inspiring the promise of social gain.

When stores offer incentives to their customers—discounts, gift vouchers, loyalty points, entry in a prize draw and so on—to refer the store to friends and family, how successful are these promotions? That depends, says referral marketing company Mention Me, which has created more than 100 referral programs for its clients. Money off has been the most effective referral incentive, in its experience, although every business will differ. But the true key to a successful program, it maintains, is to not get bogged down in the mechanics of the incentive but to look at psychological factors. “The decision to recommend is often driven by a desire for recognition and belonging, more than by a financial reward,” writes CEO Andy Cockburn in the company blog.

Mention Me describes psychological “balloons” that help lift the success of incentives and psychological “weights” that drag them down. Here’s how they work in the customer’s mind:

How easy will it be to get the reward? How many steps does the customer need to take, how many pieces of information must they provide?

Balloon: The simpler you make it, the better.

How confident am I that this will make me look good?

Balloon: As the storeowner, all your messaging about the incentive should support the following feelings in your customer: My friends will love the product; they’ll be impressed that I’m associated with this brand; they’ll see me as providing insider or expert information. And my generosity (the reward they’ll receive), not my self-interest (the reward I’ll receive), is what will come through.

On the other hand, if the customer feels a social risk in activating the refer-a-friend offer—because they fear their friends will see it as self-serving or they won’t look cool or they’ll look like a spammer or a cheap, “special offer” person—these will all weigh down an incentive’s success. For more tips on creating effective referrals, see: blog.mention-me.com/cialdinis-weapons-of-influence-for-referrals.

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Ready for Small Business Saturday?

#SmallBizSat promotions ideas

It’s not too soon to start planning for Small Business Saturday, which falls on November 26 this year. Last November some 95 million shoppers spent $16.2 million at local businesses on the “Shop Small” day, which has grown steadily since American Express launched it in 2010. Why not get your share? To give retailers a head start, the Small Business Saturday website (americanexpress.com/us/small-business/shop-small/) has plenty of ideas for pre-, day-of and post-event promotions. Downloadables are available for posters and other printed materials, as well as social-media promotions. For instance, you’ll find sample Facebook and Instagram posts and tweets you can customize and cover photos you can use, including options if you are creating a Facebook event for the day.

There’s also lots of inspiration (and downloadable event guides) if you want to band together with other local retailers and rally your community. Storeowners can learn about successful events created by previous Neighborhood Champions—a Small Business Saturday Welcome Station, a Night Out event to extend the excitement into the evening at your store (fashion show? live entertainment?), a #ShopSmall Selfie event, a neighborhood business Scavenger Hunt—complete with promo kits for each. Sign-up deadline to become a Neighborhood Champion is November 11 (kits with Shop Small merchandise are available while supplies last). For more info, go to: americanexpress.com/us/small-business/shop-small/rally-signup.

New Twitter Dashboard for Businesses

Free app lets you get things done in one place.

Twitter Dashboard is a new tool that helps smaller
businesses connect with their communities on Twitter and manage their presence more effectively. Available on the web (dashboard.twitter.com/i/landing) and iOS (itunes.apple.com/us/app/twitter-dashboard/id1120350417), the free app brings small companies some of the features larger businesses have had through third-party apps from Twitter partners. Here’s how it can help you:

• Schedule tweets directly from the dashboard, so you can time them for when your customers are likely to be online, even if you’re busy then. Edit tweets, and manage your queue on the go.

• Create a custom feed to find out what’s being said about your business. Sure, you see
@mentions, but you may be missing other comments relevant to your business. For instance, you might see a tweet from a local dancer about one of the brands you sell. You now have the chance to connect with a customer (or potential customer) in ways that add value—
alerting the person to an upcoming sale of that item, say, or the arrival of a new style or color.

• Get ideas and inspiration from other businesses. When you’re not sure what to tweet,
you may get ideas from an unrelated business. Twitter gives an example: You see [a business] tweet “Share the love. Like and retweet kind words from your customers.” This might prompt you to tweet a customer’s recent excited reaction to her first pointe shoe fitting.

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