How To Use Messaging And Bots To Increase Customer Referrals

Referrals have always had their place in marketing. It’s just that now, your customers have more reach and influence than ever before. Not only can they tell their closest friends about your product or service, but they can post Google reviews, share a social post, or use any number of methods to amplify their voice.

Nielson showed us that consumers believe recommendations from their friends and family over all forms of advertising. An impressive 92% of consumers who responded to their study agreed. We all have seen the power of word-of-mouth marketing grow.

Reaching out to your customers manually, at just the right time, to encourage or request a referral is possible. It’s just that it’s time-consuming and expensive. That’s why so many companies have turned to business messaging to increase customer referrals.

In this post, we’ll explore some of the nitty-gritty details of how to use business messaging to increase customer referrals. We’ll also give you a great example of how one of our leading clients puts messaging and bots to work in their organization to boost their customer referrals.

Why Referred Customers Are So Valuable

Aside from being a really effective form of marketing and making your business look awesome, referrals contribute directly to your bottom line. Here are 3 reasons why you need to make sure you have a healthy mix of referred customers in your pipeline:

1. Referred customers have a lower acquisition cost

Customer Acquisition Cost (CAC) is the price you pay to obtain a new customer. That number includes your total Sales and Marketing. With other methods, you pay for each click and impression that lead up to converting that customer. 

Your CAC is significantly decreased when you recruit your current customers to do the sales and marketing for you. How much it decreases depends on the success of your referral program, if you offer incentives, and if you are manually doing outreach to your customers.

2. Referred customers are more loyal

In an era where consumers have so many readily available choices at their fingertips, it’s not a surprise that brand loyalty has dwindled. It’s more important than ever to reduce your customer churn.

The Journal of Marketing reports that referred customers are 18% more loyal than non-referred customers. When your customers refer you to their family, friends, or extended network, you receive the benefit of the trust and credibility they’ve built up among their community. It’s also likely that referred customers will have a stronger sense of commitment and attachment to your company because someone they know, like, and trust has matched them to your brand.

Customers that refer you also have a higher likelihood of having a long-term relationship with your company. This is why the intention to refer a company is frequently used as an indicator of loyalty to that brand.

3. Referred customers are more profitable

So far, we’ve determined that referred customers are less costly to acquire and have a higher likelihood to be more loyal. But that’s not all. There are also other ways they are generally more profitable for a business. Referred customers are also more likely to refer others to your business. Rinse and repeat #1 and #2.

In addition to that, your referring customer will likely have a deeper relationship with your product or service. That may mean a higher frequency of using your service or a history of exploring more features. These customers are a lot more advanced than a novice customer. 

Consistent positive experiences with different products means that these customers are likely to spend more over their entire life time as your customer. Think of it like this. If you’re a clothing brand and your customer loves the new pants they bought from you, it’ll be a lot easier to sell them the shirt and the jacket.

Why You Should Automate Your Customer Referral Program

With these incredible benefits, you’d think every company would have a referral marketing campaign. The honest truth is that asking your customers at the right time to leave a review isn’t always as easy as it seems. And you will have to ask. 

According to a marketing survey conducted by Texas Tech, 83% of satisfied customers are willing to refer products and services. But, only 29% actually do. Implementing and managing customer referrals can be difficult to present at the right time if you have to do it manually.

A lot of companies out there know how painful it is to effectively execute a referral program where agents are making outbound calls to request a referral from their customers. Brinks Home Security has been able to automate their referral program using messaging and bots.

In a previous post, we examined how Brinks used messaging and bots to increase their customer retention. Now, let’s take a look at how the company was able to take their customer referral process to the next level with messaging and bots.

The Quiq bot that Brinks created combines their survey platform with their email service provider. The Quiq bot brings those two customer data streams together to invite new referrals to the Brinks family. 

Once a current customer submits a survey indicating that they are a happy customer, the Quiq bot will ask for email addresses of anyone they think would enjoy Brinks service as well. The Quiq bot will pass those email addresses to Brinks Email Service Provider. 

Prospects are then informed that they were referred and invited to take a look at Brinks products and services. If the prospect signs up, then the Quiq bot will match the newly signed customer with the customer who referred them and send both customers free product options.

All of this is done with no human intervention. The process is streamlined and infinitely repeatable with none of the intense labor and expense of outbound calling.

Don’t Wait To Use Business Messaging To Increase Customer Referrals

It’s great when your customers eagerly act as advocates for your business on their own accord. That may happen now and again, but if you want to grow your business, retain the customers you already have, and reach your revenue goals, you’ll have to be more proactive with your referral program.

Implementing messaging and bots to automate your customer referral program will save time, money, and make the process easier for your company. More importantly, an automated process like the one Brinks uses makes it easier for your customers.

If you’d like to learn more about using bots in your current workflows visit our bot webpage or take a look at one of our bot webinar replays.